Citibank $900M Wire Mistake Explained | A Breakdown In Internal Control

[@ruthvansandt9713]

I’ve seen that mostly approvers sign without properly reading or checking… that is definitely a breakdown in internal controls, and often occurs because of insufficient hiring, prior cross checking not completed, and inefficient distribution of duties.

[@FestusAdeboye]

To settle the case of return. The fine print of the contractual terms needs to be revisited by Citibank. There might be clauses that may help them argue their case. However, it could go both ways. Nice explanation by the way.

[@TheFinancialController]

Yes agreed thanks for watching

[@time968]

Not only that ... paying recurring monthly payments for a year as one single payment. It so happened that one of my colleague processed the rates invoice for the full amount rather than setting up it as a recurring payment where every month when the check run happens , the record gets picked and check is cut for 1/12 of the total amount and paid. And it being the govt payment (paid to City Council in UK) it was tough to get the money back as the government office works in diff way.

[@TheFinancialController]

Good point 😏

[@riamelwani8809]

There should be approval metrics in place. Approval should be different level for amounts above threshold

[@vinniechan]

I work in the same I industry and once administer a loan with 90 lenders for borrower Basically sleepless night The question is how is there fund balance to be sent in the first place There are usually other terms governing early prepayments as well

[@TheFinancialController]

The money sent was not fund balance. It was Citis own money. I am sure lenders didnot mind the early prepayment since revlons business is going thru tough times

[@vinniechan]

@@TheFinancialController exactly. on the ledger, there should be a separate client and house account (even though it might be one just crated artificially)

[@SelenAque]

@@vinniechan Agreed on this.

[@themanfromoregon6047]

I'd be interested in a video talking about leveraged buyouts, which I don't fully understand but I feel like it's an interesting concept for a video with historical examples.

[@McJamEs209]

Season 5 of Billions should create a scene of Citibank's and have Axe Capital, (Michael Prince now owns), be the lender that receives a 900M payment. As well have Axe be the person driving this strategic planning.

[@reeseanderson4432]

That money in Bobby Axelrod's hands? Citibank would never see it again 😭

[@TheFinancialController]

You are not wrong :)

[@mom3pookies]

I think when the Pay Off Principal box is checked a popup box should appear with the total balance to draw one's attention to the actual amount. I also think that when an amount is entered that is not the "normal" monthly amount the box should turn red. One or both of these could have alerted the Maker to the error. The monthly box should remain red until it is cleared by Citibank employee (the only one with the power to do so.) Since the money is Citibank's money and not Revlon's the lenders are not entitled to keep it. Citibank should also have cap amounts for wire transfers. If it is more than what is the customer's account it should not go through.

[@Rhule_N_Reyne]

I LOVE your suggestions.❤❤

[@Rhule_N_Reyne]

It infuriates me when the wrong or right recipient gets to keep the money they are not entitled to in part or whole due to human error. The judiciary seems to be applying the same principle of children's playground game of Finders Keepers, Losers Weepers to major financial platforms. So the next time someone loses their wallet or forgets their laptop or anything of value anywhere, we should simply keep it. Say: Tough! You snooze, you lose ". It happened to a friend about 3 years ago. Fortunately, she lost £900 she could ill afford, by entering an incorrect digit when setting up bank details for her recipient. It still smarts.

[@MsGinnnaaa]

I’d like to know what your idea is on Citibank offering cash bonuses for you to put your money into their bank and open new accounts and then when the due date comes, Citibank doesn’t pay!! What can somebody do about that??

[@Audiovisual00]

Between nice Video Bill.Watched it twice to understand better.

[@rammohan6880]

If my understanding is right, I think if principal amount is repaid by Revlon to Citi Bank Administrator(In this case) after the maturity of loan period, $ 500 MN will be withheld by Citi Bank. Is my understanding correct. But the Citi Bank will lose the interest cost on $ 500 MN till they receive principal amount from Revlon.

[@TheFinancialController]

Correct but it’s too much capital to lose interest on

[@colinarmstrong7775]

Great video - very clear 👍

[@vertigo2112]

Did the 3 employees who did the wire and checked the wire get fired?

[@Channelll111]

So the remaining $500m with Lenders would replace the loan repayment of Revlon?

[@TheFinancialController]

Yes

[@time968]

What was the addl control checks put in place after this case? its serious control issue I guess!

[@TheFinancialController]

I plan to make a separate video on treasury control

[@time968]

@@TheFinancialController Thanks Bill.

[@tundunadewunmi6896]

Wow! There is NO way the Hedge funds managers will return the funds based on the risks of recovery. However the terms of the contracts will come into evidence. This is a good time to review contracts to address the possibility of such!

[@TheFinancialController]

Yes agreed

[@jessy6603]

The lenders should give back the money as the money belongs to Citibank and not revlon . But that will not work as lenders are only interested in receiving money , it does not matter how or who it belongs to.

[@time968]

Does Wipro's contract with Citibank will have penalty clause ?

[@TheFinancialController]

Hmm I have not read anything about that. But I am sure they will include something if the relationship is to continue

[@SelenAque]

looks like WiPro needs UX designer for their app.

[@TheFinancialController]

True

[@hazemgamal696]

That was a huge mistake and giving the money back depends on the lenders character but I think they should all give it back as it's not Revlon's money, finally thank you for your useful and interesting videos

[@TheFinancialController]

Hey Hazem yes agreed. Thanks for watching:)

[@tedydjajawinata2480]

Hmm... they're trying to transfer the risk to the middleman. The transfer mistake should not be related to the lending arrangement at all. The lenders should give the money back. They cannot manage their risk by taking someone else's money in hostage. Btw, did Citibank sue Wipro for this?

[@TheFinancialController]

Agreed. And not sure about suing wirepro if the burden was on Citibank manager to review before release of wire

[@tedydjajawinata2480]

@@TheFinancialController True. Given the amount of the transfer, I would have thought the six eyes should be part of Citibank org involving higher up controllers. Don't you think? Excellent video btw. Thanks for doing this 🙏

[@Audiovisual00]

Ok, So The Wipro employees must be outsourced emp by Citi, though they work in the same office of Citi,but payroll will be under Wipro. 👍

[@ramachandransubramaniyan9675]

Why not keeping it with hedge funds, what wrong! they can keep it.. (Another question) wire can't be chargeback ?

[@TheFinancialController]

This money is Citibank’s money and so the lenders cannot keep it. Also chargebacks work with credit card spend not wired :)

[@ramachandransubramaniyan9675]

@@TheFinancialController Alright! Noted thanks!

[@melodymundy5985]

Citibank is AWFUL!! This is KARMA!!

[@TheFinancialController]

Agreed!

[@reeseanderson4432]

Thanks for doing this video!!!! Really appreciated the insight. Would I give the money back? Probably yeah as a favour to the person who's probably getting fired 😂 I may have to think twice about it though

[@TheFinancialController]

Haha you are probably too kind

[@rosmaryalgarin9292]

thanks for sharing this video

[@TheFinancialController]

Thanks 🙏

[@esayasberhane4096]

net income $40m not $40B. But great explanation.

[@TerriGeiger777]

Great Content! I would like to see more of this. Snack sized American Greed stories

[@TheFinancialController]

Thanks Terri! Yeah what a fiasco that was 😅

[@reeseanderson4432]

So if the 500M debt remains "settled" even after Citibank's appeals would Revlon be off the hook for the debt? 👀 If I were Revlon I wouldn't give Citibank squat.

[@TheFinancialController]

Revlon would still be liable for it, unless of course they go bankrupt 🤭

[@jeycee6807]

❤️

[@TheFinancialController]

🙏

[@albertdunkhausker7397]

Six eyes should be 3 Citibank employees. Also it is “principal” amount not “principle”

[@TheFinancialController]

Thanks for the correction

[@albertdunkhausker7397]

Any thoughts to a video on SAS No. 139 (amends AU-C 805)? I am reviewing this for CPEs and don’t understand this subject. Thanks!