After this afternoon’s Wall Street crash, an executive at one of Citigroup (C)’s rivals told The Observer that a “trading error at Citi” caused the gargantuan tumble. At the same time, CNBC was reporting that a Citi trader may have accidentally “entered a ‘b’ for billion instead of an ‘m’ for million in a trade possibly involving Procter & Gamble.”
That’s known in the business as a fat-fingered trade–which is exactly what it sounds like, and has happened in recent years from India to Japan.
So is one fingertip on one Citigroup person to blame for a near-historic Wall Street fall? “As a believer of market efficiency and sniffing out the truth we were concerned about the Citi rumors,” the bank’s Armando Diaz said on a conference call just now, according to a Dealbreaker transcript. Mr. Diaz is a Goldman alum who was hired in 2008 to lead Citi’s U.S. Institutional Trading.
“We have not found,” he said, “any info that would lead us to believe we were involved in a technical error.” Media were not allowed to listen in.
How did his former colleagues at Goldman Sachs (GS) handle the crash? “I went to lunch and the market dropped 800 points. People were pretty chill and like, ‘Oh, it’s just some program trading thing,'” a source in Goldman’s investment management said. “[The] Citi rumor spread here before I started seeing it hit the news, because people were talking to clients on trading desks who were all hearing it too.”
“We, along with the rest of the financial industry, are investigating to find the source of today’s market volatility,” a Citigroup statement said. “At this point we have no evidence that Citi was involved in any erroneous transaction.” Ed Skyler, the former deputy mayor, single-handedly took over nearly all communications at the bank only this Monday.
