Citigroup Inc lost the legal battle to recover half a billion dollars it sent to Revlon Inc. leaders and forced to answers to regulators and tighten its internal controls after the embarrassing blunder.
On Tuesday, U.S District Judge Jesse Furman ruled that 10 asset managers for the lenders- which include Brigade Capital Management, HPS Investment Partners and Symphony Asset Management- don’t have to return $504 million that Citibank said it mistakenly transferred in August while trying to make an interest payment.
The Judge further added that they shouldn’t have expected to know that the transfer, which totalled more than $900 million before some lenders returned their share, was an error.
Furman wrote “To believe that Citibank, one of the most sophisticated financial institutions in the world, had made a mistake that had never happened before, to tune of nearly $1 billion would have been borderline irritated”.
Citigroup, that is said to be in the midst of a yearlong effort to update its underlying controls and technology after regulators slapped it with a $400 million fine for deficiencies in both areas last year has received this decision and judgement as its latest blow.