Frontlist | Nearly $900 million gaffe occurred in Citigroup

The non-returning lenders believed, and were justified in believing, that the payments were intentional, Furman wrote. To believe otherwise - to believe that Citibank, one of the most sophisticated financial institutions in the world, had made a mistake that had never happened before, to the tune of nearly $1 billion - would have been borderline irrational. Furman left in place a temporary ban on the lenders' using the transferred funds, reflecting Citigroup's expected appeal. In a joint statement, the lenders' lawyers Adam Abensohn and Robert Loigman said they were extremely pleased with the decision. Administrative agents typically distribute interest payments and perform back-office services for clients. Industry groups have said a ruling against Citigroup could expose banks to excessive liability risks. The Loan Syndications and Trading Association, whose roughly 530 members include Citigroup and some Revlon creditors, said such a ruling could destabilize the $1.2 trillion U.S. syndicated loan market. Shortfalls in Citigroup's internal controls were a factor in Chief Executive Mike Corbat's planned early retirement this month. Source: Reuters