Citi Reportedly Fires Delta One Trader That Sparked $300 Billion Flash-Crash

The ‘human’ behind the ‘human error’ that caused last week’s massive ‘flash crash’ in European equity markets has been identified… and reportedly fired.

As a reminder, early in the morning on May 2nd, European stock markets suddenly puked…

…driven by sudden weakness stemmed from the Nordic region where the OMX Stockholm 30 Index slumped as much as 8% in just five minutes before recovering most of the losses shortly after…

That swift decline prompted trading in several European markets to be briefly suspended. At its peak, the incident wiped out 300 billion euros ($315 billion) from the market within just minutes.

As rumors spread, Citigroup quickly confirmed its role in the flash crash, releasing the following brief statement:

“This morning one of our traders made an error when inputting a transaction. Within minutes, we identified the error and corrected it.”

The FT reported at the time that one trader said the basket was for trades on the Euro Stoxx 50 – an index that tracks blue-chip companies in the eurozone. The issue was further compounded by an error in a conversion to Swedish krona, which meant Stockholm-listed shares bore the brunt of the mistake.

And now, Citi has reportedly taken action and is overhauling one of its key equity business units.

As Reuters reports, Ali Omari, who was EMEA Head of Delta One Forwards and Sectors, has left the U.S. bank, two people with knowledge of his departure, who declined to be named, said.

So-called Delta One desks sell structured financial products to sophisticated investors including pension funds, hedge funds and blue chip corporate clients.

Reuters reports that two of the three sources familiar with the matter said the Delta One unit was linked to, although not responsible for, the data input blunder that caused the flash-crash.

In addition to yet more reputation damage, it is unclear how much money the Citi desk lost during this incident since Nasdaq said it would not cancel any of the trades that took place.

Citi is now looking to name a new Head of Forward Trading based at its European headquarters in London, a job vacancy posted on professional networking site LinkedIn shows.

This isn’t the first time that such an incident has happened at Citigroup.

In 2020, a trader at the bank accidentally transferred a nearly $900 million interest payment to creditors of the cosmetics company Revlon Inc. instead of the intended $8 million.

Citigroup blamed human error for the mistake, and the bank was fined $400 million by U.S. regulators for failing to correct longstanding deficiencies in its risk and control systems.