The Japanese trading operations of Citigroup Inc. are being investigated by the Bank of England for its role in October’s “flash crash” in sterling, the Financial Times reported on 6 December.
The investigation is focusing on multiple sell orders that came from Citi’s Tokyo desk. Although not believed to have started the crash, they nonetheless played a key role in sending sterling to its lowest value in 31 years. A panicky trader and an electronic tool known as an Aggregator are possible reasons for the orders.
The incident saw the value of the pound fall from $1.26 to $1.14, with the currency sliding 9% in about 40 seconds.