Citibank loses bid to recover $500M accidentally wired to Revlon Lenders, Federal Judge Rules

Citibank lost the bid to recall $500 million that it accidentally wired last year to a group of companies that loaned money to beauty company Revlon.

US's largest bank made the costly mistake of wiring $900 million in full loan repayment instead of the the $7.8 million that they intended to send out as a small interest payment on Revlon’s behalf.

As a result, ten investment advisory firms, who had sued Revlon and Citi for non-repayment of loans, refused to return about $500 million.

According to a district court filling on Tuesday, the US District Judge Jesse Furman ruled in favor of the lenders that collectively received more than $500 million by mistake on the 11th of August, 2020.

The court's ruling explained how Citibank has a “six eyes” security safeguard that requires three people to approve any transaction. However, this mistake was a result of a contractor checking the wrong box on a digital payment form.

While cash recipients are typically required to return cash transferred in error, Furman ruled that there were reasonable grounds to regard this payment as intentional rather than a mistake, as reported by The New York Times.

Despite the ruling being in the lenders, Furman has placed a temporary restraining order to prevent the money from being used in case there is an appeal.

Citigroup strongly disagrees with the court's decision and wants to appeal the ruling, according to Forbes.