Citibank Out $500 Million it Wired by Mistake

Citibank has made arguably the biggest blunder in banking history and won't be able to recover the almost half a billion dollars it accidentally wired to Revlon's lenders, a US District Court judged ruled.

According to CNN, Citibank which was acting as Revlon's loan agent, meant to send $8 million in interest payments to the cosmetic company's lenders and accidentally wired almost 100 times that amount, including $175 million to a hedge fund. In total Citibank accidentally sent $900 million to Revlon lenders.

Some lenders actually returned the funds but not all. Citibank filed a lawsuit in August seeking the return of their money, but it still has not received $500 million from 10 investment advisory firms. The law usually punishes those who spend money accidentally deposited in their account, but New York law has exceptions to this rule known as "discharge for value defense." If the beneficiary is entitled to the money and did not know it was accidentally wired they can keep it. The amount of money accidentally wired was the exact amount to the penny Citibank owed them although the loan wasn't set to mature for some time. Citibank is out of luck with this one.

Photo Credit: Getty Images

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