The report claims that while Citi did not start the crash, its Japanese trading operation made things worse by placing a large number of sell orders after the initial fall began, citing people with knowledge of the investigation.
The problem reportedly stemmed from one trader. The paper quotes an unnamed source as saying the trader in question “panicked” when the pound started to fall.
Sterling plunged to a three-decade low in Asian trade in early October, falling as much as 6% in just 2 minutes. While the motivation for the initial fall is not clear, traders said at the time that thin trading volumes meant the impact was outsized and created a downward spiral as the slump triggered more algorithms to sell. The FT says that the Citi trader in question fired off multiple sell orders, sending the pound spiralling.
Citi said in a statement given to the FT that it “managed the situation appropriately and our systems and controls functioned throughout the period.”