Behind the Back-Office Blunder That Cost Citigroup $500 Million

Fat-finger errors can happen at even the biggest financial companies. There was the time, three years ago, when Deutsche Bank sent €28 billion ($33 billion)—more than its entire market value—to one of its outside accounts. Such mishaps typically result in major embarrassment, but are quickly reversed.

Then there’s the latest saga involving Citigroup Inc., where a human error forced it into a showdown with some of its most aggressive clients. The bank mistakenly paid almost $900 million to creditors of troubled lipstick maker Revlon Inc., the crown jewel of billionaire Ronald Perelman’s business empire. The error has forced Citigroup to restate fourth-quarter earnings and do a good deal of explaining in front of regulators. And the bank could ultimately be out more than $500 million.