Citigroup’s London trading desk was behind a flash crash in Europe that sent shares across the Continent tumbling after a sudden 8% decline in Swedish stocks.
The selloff was triggered by a large erroneous transaction made by the U.S. bank’s London trading desk, according to people with knowledge of the matter who asked not to be identified discussing private information.
A knee-jerk selloff in OMX Stockholm 30 Index in five minutes wreaked havoc in bourses stretching from Paris to Warsaw, toppling the main European index by as much as 3% and wiping out 300 billion euros at one point.
A representative for Citi declined to comment.
While it was not immediately clear what caused the short-lived slump, a spokesman for Nasdaq Stockholm said it wasn’t a technical glitch on their part. “Our first priority was to exclude technical issues in our systems, and our second priority was to exclude an external attack on our systems. We have now excluded both,” David Augustsson, a spokesman for Nasdaq Stockholm, said.
The OMX Stockholm 30 Index closed 1.9% lower, roughly in line with a drop in European markets.
The error could potentially cause monetary and reputational damage to Citi as Nasdaq said it will not cancel any trades made on the Nordic markets.
— With assistance from Jan-Patrick Barnert, Jonas Ekblom and Jenny Surane.
