The main US bank “Citigroup” has won a legal dispute over compensation for about half a billion dollars transferred in error. A Manhattan appeals court overturned the lower court ruling on Thursday.
I decided the money was owed to the financial group. The judges considered that the recipients should have known that the transfer was a defect.
The case caused an uproar in August 2020: on behalf of cosmetics manufacturer Revlon, Citi mistakenly paid the entirety of a loan of about $900 million that was actually owed in 2023 to creditors – hedge funds and other professional investors. Only $7.8 million in interest payments were due. Since only some of the lenders returned the money, a legal battle ensued for about $500 million.
Citigroup can breathe a sigh of relief after the appeal ruling, but the incident should be remembered as an embarrassing chapter. The bank blamed human error, but the incident brought him a lot of ridicule and spite, and not just on Wall Street. In the first place, City suffered defeat. At the time, the judge ruled that it was unreasonable to assume that a highly developed financial group would make a bad transfer of this magnitude.
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