Posted on 02/17/2021 10:42:42 AM PST by nickcarraway
A federal judge on Tuesday said Citigroup Inc C.N is not entitled to recoup half a billion dollars of its own money that it mistakenly wired lenders of Revlon Inc, in what he called "a banking error of perhaps unprecedented nature and magnitude."
U.S. District Judge Jesse Furman in Manhattan said the Aug. 11, 2020, transfers were “final and complete transactions, not subject to revocation.”
Citigroup plans to appeal. “We believe we are entitled to the funds and will continue to pursue a complete recovery of them,” a spokeswoman said. The blunder was the latest misstep involving internal controls at Citigroup, which federal regulators fined $400 million in October over longstanding deficiencies.
(Excerpt) Read more at reuters.com ...
not recoverable? unbelievBLE
Sound ruling (from the article):
But in a 101-page decision, following a six-day trial in December, Furman said the transfers were a “discharge for value,” matching “to the penny” what the lenders were owed.
“The non-returning lenders believed, and were justified in believing, that the payments were intentional,” Furman wrote. “To believe otherwise - to believe that Citibank, one of the most sophisticated financial institutions in the world, had made a mistake that had never happened before, to the tune of nearly $1 billion - would have been borderline irrational.”
I thought it was settled law that BIG Banks are not responsible for their errors?
>>Sound ruling
Indeed, and rather surprising given that the judge is an Obama appointee.
A next door neighbor of mine told me about 6 years ago that his former employer had sent to much in a payroll direct deposit that wasn’t that out of normal and he was charged for not reporting it to his employer as fraud. He was forced by the courts to pay it back and faced charges.
Are banks treated differently?
Citicorp personnel dept all graduated from the “Mediocre is good enough” university!!
Apparently
Of course they are.
Every time I have signed up for direct deposit I have seen clauses in the contract that I was required to report any mistakes and the company could recover the money from my bank account without giving me notice. I wonder if the recipients of the money had no contract with Citi, so they had no contractual requirement to return the money.
See how sympathetic they are if you make an error in your credit card payment.
1. Citibank owed Revlon $900 million for some reason or another.
2. The loan was supposed to be paid out over the course of many years.
3. Instead, Citibank mistakenly sent the Revlon lenders $900 million to pay off the balance in full.
4. The money is not recoverable because the TIMING of the $900 million payment was apparently a "mistake," but that exact amount of money was legitimately owed to the Revlon lenders. It's not as if Citibank sent $900 million to pay off a $90 million loan.
By Jove, I think you’ve got it!
What you just described makes a lot of sense.
If the money is owed, then paid, what industry in their right fiscal mind would give it back?
The money was legally owed to Revlon. The debt was paid off.
End of story!
Take it outta the paycheck of the guy/gal that screwed up.
Sarcasm aside, for the little guy, the law is ‘settled.’
For instance, if your bank mistakenly misapplies a deposit intended for one account to your account, you must return that money that other account must return the money.
Perhaps they’re looking at this differently because it’s not a deposit being misapplied, but a payment. IOW, it’s not a mistake with a FDIC account. Instead, it’s a problem with Citigroup’s own account’s payable department (I think).
Apples and oranges. These Revlon creditors were in fact owed the money.
you are unbelievably good
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.