Citibank Mistakenly Wired $ 900 Million To Lenders, But Won’t Get It Back
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(NEXSTAR) – Citibank will not get back the nearly $ 900 million it accidentally sent to lenders, a US district court judge has ruled.
In August, Citibank intended to wire around $ 7.8 million to lenders of makeup brand Revlon.
According to the court ruling, he “rather committed one of the biggest blunders in banking history: he transferred by mistake, in addition to Revlon’s $ 7.8 million, nearly $ 900 million from his own money too ”.
Full payment of the loan – $ 1.8 billion – was not due until 2023. According to the court ruling, “human error” was at the root of the error.
Despite the error, the judge ruled that the lenders will be able to keep the money.
While the law generally treats “a failure to return money transferred in error” as “unjust enrichment or conversion”, under New York law there is an exception to the rule.
According to the court ruling: “The beneficiary is allowed to keep the funds if he discharges a valid debt, the beneficiary has not made any false statements to induce payment and the beneficiary has not been informed of the mistake “.
The defendants in this case included ten investment firms. They received over $ 500 million from erroneous transfers from Citibank.
Citibank said in a statement, “We strongly disagree with this decision and intend to appeal. We believe we are entitled to the funds and will continue to pursue their full recovery. “
In a statement shared with Reuters, lawyers representing the lenders said they were “extremely satisfied” with the verdict.
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