6 ms·

$7m is pocket change for Citigroup. No wonder the big banks keep shitting the bed. There's never any real consequences for their fuckups.

rtpg 10y ago
> Citigroup failing to send information on 26,810 transactions in over 2,300 such requests. 26810 requests, do you think they made more than $7m on this? It's about proportional fines. Just because they're a giant company doesn't mean we should find then $1b for forgetting to put a handicapped parking space at one of their offices.
- eli 10y ago
  There is a school of thought that punitive fines should be a proportion of company value/earnings rather than an absolute dollar figure to exact an equal amount of discomfort. I think Finnish speeding fines are a percent of income.
  - insickness 10y ago
    Even if fines were in proportion to company value/earnings, they would also need to be in proportion to the violation. Not every violation is equally as egregious.
  - Guvante 10y ago
    Too punitive of a fine would result in Citigroup not reporting.
  - ubernostrum 10y ago
    There is a school of thought that punitive fines should be a proportion of company value/earnings rather than an absolute dollar figure to exact an equal amount of discomfort. In the infamous McDonald's coffee lawsuit, this was actually the motivation behind the initial large damage award. The jury attempted to award punitive damages equal to two days' worth of McDonald's coffee revenue. (obligatory note here for the many people who have heard false information about that case: the coffee spilled in a car, yes, but the car was motionless, in a parking space, and the person who spilled it was not the driver, and was found partially at fault for the spill; she suffered severe burns requiring hospitalization and skin grafts, which is not generally what one expects from coffee; it was found McDonald's served its coffee significantly hotter than other chains, in a temperature range making burns more likely, and was aware of the fact that it could cause severe burns because this wasn't the first case, and in fact McDonald's was aware of hundreds of cases of burns resulting from its coffee; the initial damage award was significantly reduced by the judge; search for Liebeck v. McDonald's for more details)
    - rtpg 10y ago
      Yeah though even then it was connected to the coffee revenue, right? I feel like this school of thought is also the one that ends up with things like "3 strikes and you're 25-to-life"
      - shoo 10y ago
        I think I see what you're getting at: punishments or penalties for offences that are arguably disproportionate to the crime. On the other hand I think there is a gulf of difference between "3 strikes" laws and punitive damages being awarded against a company for an arguably frivolous lawsuit. The former will disproportionally target people who are relatively disadvantaged, e.g. people living in poverty or drug addicts, and ruin their lives. The latter (in this case) targeted a multinational corporation, with the damages being around 0.01% of its annual profit or less. McDonald's can survive that. Even if a person or two in the chain of command get fired, there's a gulf of difference between losing your job and getting locked up for 25 years.
        thinkloop 10y ago
        > punishments or penalties for offences that are arguably disproportionate to the crime This is not incompatible, the school of thought still wants to achieve that. "this crime is minor and deserves a minor punishment of level 2 suffering, what's a good way to inflict level 2 suffering on this individual"
        lagadu 10y ago
        > an arguably frivolous lawsuit. I know you're not talking specifically about mcd coffee suit, but there's nothing arguable about that one; because there's still some measure of belief that it was frivolous here's a quote taken from the wikipedia article[0]: > Liebeck was taken to the hospital, where it was determined that she had suffered third-degree burns on six percent of her skin and lesser burns over sixteen percent. She remained in the hospital for eight days while she underwent skin grafting. During this period, Liebeck lost 20 pounds (9 kg, nearly 20% of her body weight), reducing her to 83 pounds (38 kg). After the hospital stay, Liebeck needed care for 3 weeks, provided by her daughter. Liebeck suffered permanent disfigurement after the incident and was partially disabled for two years. [0] https://en.wikipedia.org/wiki/Liebeck_v._McDonald%27s_Restaurants#Burn_incident https://en.wikipedia.org/wiki/Liebeck_v._McDonald%27s_Restau...
  - noinsight 10y ago
    > I think Finnish speeding fines are a percent of income. Yes and no. Lesser infractions are static amounts, larger ones are based on day fines, they determine the amount of days -> units for the fine based on the severity of the infraction and the units are used as a multiplier against your daily income for your fine.
  - HighPlainsDrftr 10y ago
    I've thought long and hard about this for many years. Punitive damages - eg jail time or financial punishment should be removed from our system except in cases where people are unfit to be in society (like murders' etc). What should happen - all of the management at Citgroup should have to attend a 5 day training provided by the SEC showing how they can fix the reporting problems they have. How it causes problems to society. How it is dishonest - and how it wastes taxpayers dollars. I'm betting having that happen to Citigroup 2 or 3 times a year would really make them think about following the rules. Plus - its positive reinforcement instead of negative (punative) damage.
    - deleted 10y ago
      [deleted]
  - saiya-jin 10y ago
    same goes for Switzerland, but as common sense suggests, there is and should be some threshold based on severity. below is static fine, above it things get more interesting/intense. some (a lot) people would like to see banks burn, in same way common folks enjoyed public decapitations of ruling classes in french revolution. not judging, hard topic on its own, probably depends on where you are positioned in your life.
  - snarfy 10y ago
    Fines that aren't proportional are unfair to the poor and too lenient for the wealthy.
  - dublidu 10y ago
    Large companies have more employees and will have more violations, maybe proportional to their size, whereas a rich person should not have more speeding tickets than a poor person and should arguably pay more per violation.
    - hx87 10y ago
      That may have been true back in the 20th century, but not anymore--Apple and Walmart have market caps on the same order of magnitude, but one employs far more employees than the other. Besides, if you have more $ per employee, that just means each violation will cost more money/damage.
  - limeyx 10y ago
    For me it's not as much about fining them as it is holding the correct people responsible (not just throwing some junior engineer under the bus as usually happens) and making sure it cannot happen again or gets noticed much more quickly
kchoudhu 10y ago
These fines are fundamentally stupid: yes, Citi's IT fucked up, but the fault is with the regulators for having such braindead reporting requirements to begin with. Instead of something sensible like "you trade, you report", the regulators have set up a patchwork of formats, inclusion criteria and target agencies that pretty much ensures that lapses like this occur. Turning Frank-Dodd into workable code is fucking hard: I spent a couple of years pushing that boulder up the slope until I ragequit a couple of months ago. The regulators should be ingesting data in one place and running analytics on a data lake. The banks are so sick of spending money dealing with the lack of regulatory technical competence that they'll probably happily pony up a couple of billion dollars between them to set up the surveillance system for the Feds; doing it once is cheaper in the long run than repeating the same set of mistakes at every bank on the Street.
- eru 10y ago
  The banks are sick of this, but just like the grass that doesn't want to be eaten by the cows, they also depend on this complicated regulation to keep our competitors.
  - kchoudhu 10y ago
    I'm not sure complicated reporting is how banks are maintaining margins. They're diverting billions into complying with these requirements, for very little gain.
    - sseveran 10y ago
      And anyone entering their business would have to as well. The large banks are happy to have these regulations in some ways as it makes it hard for midsized banks to grow and compete with them.
      - eru 10y ago
        Yes. Or for scrappy upstarts to compete from their garage.
aaron695 10y ago
This is the sort of comment why people vote for Trump. They made a mistake, a programming mistake no less, something many people here have done. Then fully admitted it when they found out. Yet this is them being evil? No wonder people vote against the left.
- cm2187 10y ago
  The other thing is with a company the size of citigroup (250,000 employees), it is statically impossible not to have: - incompetent and/or careless employees and managers - dishonnest employees - computer bugs, glitches, clerical errors If you take down a large corporation every time you find any of these, there will be no corporation left within a year. Just small companies that were statistically lucky to have neither of those that particular year. Name me a program, any program (other than Hello World) where no bug has never been found!
  - eru 10y ago
    They had this bug for more than a decade. They should have systems in place to look for these things. People make mistakes, but these mistakes should be caught before they get into production. And the ones that still make it into production should be hunted.
    - cm2187 10y ago
      Should we discuss about all the 15 years old bugs that are found in Windows, Linux and MacOS which are well into production (and many of them critical bugs that affect the core of the product)? Has a software company ever been fined or held liable for bugs in its products? In fact too often, bug fixes are paid updates. Financial companies are held to extraordinary standards, and in my opinion it's a game they cannot win.
      - tremon 10y ago
        This is not a minor bug, this is a bug that caused data to be misrepresented. If you want to compare it to OS bugs, then you need to look at silent data corruption: how many data corruption bugs have gone undetected in operating systems for 15 years?
jondubois 10y ago
I was thinking the exact same thing. They should have a really thorough investigation and they need to make sure that NO ONE knew about this bug at any point in the past 15 years. If Citygroup has a habit of hiring and fostering employees who turn a blind eye and keep their mouths shut, then they should be punished severely.
- eru 10y ago
  If someone knew and didn't say, they should be punished. If no one knew, the managers who were tasked with setting up procedures and systems for knowing, should be punished.
  - arjie 10y ago
    Dude, they fucked up. You don't have to send Judge Dredd over for this.
ryporter 10y ago
Citigroup was $7 BILLION for their mortgage fraud. [1] I think that can be considered a "real consequence." This was a far less severe infraction, and the fine was correspondingly much lower. [1] http://www.reuters.com/article/us-citigroup-settlement-doj-idUSKBN0FJ13120140714 http://www.reuters.com/article/us-citigroup-settlement-doj-i...

rtpg 10y ago

> Citigroup failing to send information on 26,810 transactions in over 2,300 such requests. 26810 requests, do you think they made more than $7m on this? It's about proportional fines. Just because they're a giant company doesn't mean we should find then $1b for forgetting to put a handicapped parking space at one of their offices.

eli 10y ago
There is a school of thought that punitive fines should be a proportion of company value/earnings rather than an absolute dollar figure to exact an equal amount of discomfort. I think Finnish speeding fines are a percent of income.
- insickness 10y ago
  Even if fines were in proportion to company value/earnings, they would also need to be in proportion to the violation. Not every violation is equally as egregious.
- Guvante 10y ago
  Too punitive of a fine would result in Citigroup not reporting.
- ubernostrum 10y ago
  There is a school of thought that punitive fines should be a proportion of company value/earnings rather than an absolute dollar figure to exact an equal amount of discomfort. In the infamous McDonald's coffee lawsuit, this was actually the motivation behind the initial large damage award. The jury attempted to award punitive damages equal to two days' worth of McDonald's coffee revenue. (obligatory note here for the many people who have heard false information about that case: the coffee spilled in a car, yes, but the car was motionless, in a parking space, and the person who spilled it was not the driver, and was found partially at fault for the spill; she suffered severe burns requiring hospitalization and skin grafts, which is not generally what one expects from coffee; it was found McDonald's served its coffee significantly hotter than other chains, in a temperature range making burns more likely, and was aware of the fact that it could cause severe burns because this wasn't the first case, and in fact McDonald's was aware of hundreds of cases of burns resulting from its coffee; the initial damage award was significantly reduced by the judge; search for Liebeck v. McDonald's for more details)
  - rtpg 10y ago
    Yeah though even then it was connected to the coffee revenue, right? I feel like this school of thought is also the one that ends up with things like "3 strikes and you're 25-to-life"
    - shoo 10y ago
      I think I see what you're getting at: punishments or penalties for offences that are arguably disproportionate to the crime. On the other hand I think there is a gulf of difference between "3 strikes" laws and punitive damages being awarded against a company for an arguably frivolous lawsuit. The former will disproportionally target people who are relatively disadvantaged, e.g. people living in poverty or drug addicts, and ruin their lives. The latter (in this case) targeted a multinational corporation, with the damages being around 0.01% of its annual profit or less. McDonald's can survive that. Even if a person or two in the chain of command get fired, there's a gulf of difference between losing your job and getting locked up for 25 years.
      - thinkloop 10y ago
        > punishments or penalties for offences that are arguably disproportionate to the crime This is not incompatible, the school of thought still wants to achieve that. "this crime is minor and deserves a minor punishment of level 2 suffering, what's a good way to inflict level 2 suffering on this individual"
      - lagadu 10y ago
        > an arguably frivolous lawsuit. I know you're not talking specifically about mcd coffee suit, but there's nothing arguable about that one; because there's still some measure of belief that it was frivolous here's a quote taken from the wikipedia article[0]: > Liebeck was taken to the hospital, where it was determined that she had suffered third-degree burns on six percent of her skin and lesser burns over sixteen percent. She remained in the hospital for eight days while she underwent skin grafting. During this period, Liebeck lost 20 pounds (9 kg, nearly 20% of her body weight), reducing her to 83 pounds (38 kg). After the hospital stay, Liebeck needed care for 3 weeks, provided by her daughter. Liebeck suffered permanent disfigurement after the incident and was partially disabled for two years. [0] https://en.wikipedia.org/wiki/Liebeck_v._McDonald%27s_Restaurants#Burn_incident https://en.wikipedia.org/wiki/Liebeck_v._McDonald%27s_Restau...
- noinsight 10y ago
  > I think Finnish speeding fines are a percent of income. Yes and no. Lesser infractions are static amounts, larger ones are based on day fines, they determine the amount of days -> units for the fine based on the severity of the infraction and the units are used as a multiplier against your daily income for your fine.
- HighPlainsDrftr 10y ago
  I've thought long and hard about this for many years. Punitive damages - eg jail time or financial punishment should be removed from our system except in cases where people are unfit to be in society (like murders' etc). What should happen - all of the management at Citgroup should have to attend a 5 day training provided by the SEC showing how they can fix the reporting problems they have. How it causes problems to society. How it is dishonest - and how it wastes taxpayers dollars. I'm betting having that happen to Citigroup 2 or 3 times a year would really make them think about following the rules. Plus - its positive reinforcement instead of negative (punative) damage.
  - deleted 10y ago
    [deleted]
- saiya-jin 10y ago
  same goes for Switzerland, but as common sense suggests, there is and should be some threshold based on severity. below is static fine, above it things get more interesting/intense. some (a lot) people would like to see banks burn, in same way common folks enjoyed public decapitations of ruling classes in french revolution. not judging, hard topic on its own, probably depends on where you are positioned in your life.
- snarfy 10y ago
  Fines that aren't proportional are unfair to the poor and too lenient for the wealthy.
- dublidu 10y ago
  Large companies have more employees and will have more violations, maybe proportional to their size, whereas a rich person should not have more speeding tickets than a poor person and should arguably pay more per violation.
  - hx87 10y ago
    That may have been true back in the 20th century, but not anymore--Apple and Walmart have market caps on the same order of magnitude, but one employs far more employees than the other. Besides, if you have more $ per employee, that just means each violation will cost more money/damage.
- limeyx 10y ago
  For me it's not as much about fining them as it is holding the correct people responsible (not just throwing some junior engineer under the bus as usually happens) and making sure it cannot happen again or gets noticed much more quickly

kchoudhu 10y ago

These fines are fundamentally stupid: yes, Citi's IT fucked up, but the fault is with the regulators for having such braindead reporting requirements to begin with. Instead of something sensible like "you trade, you report", the regulators have set up a patchwork of formats, inclusion criteria and target agencies that pretty much ensures that lapses like this occur. Turning Frank-Dodd into workable code is fucking hard: I spent a couple of years pushing that boulder up the slope until I ragequit a couple of months ago. The regulators should be ingesting data in one place and running analytics on a data lake. The banks are so sick of spending money dealing with the lack of regulatory technical competence that they'll probably happily pony up a couple of billion dollars between them to set up the surveillance system for the Feds; doing it once is cheaper in the long run than repeating the same set of mistakes at every bank on the Street.

eru 10y ago
The banks are sick of this, but just like the grass that doesn't want to be eaten by the cows, they also depend on this complicated regulation to keep our competitors.
- kchoudhu 10y ago
  I'm not sure complicated reporting is how banks are maintaining margins. They're diverting billions into complying with these requirements, for very little gain.
  - sseveran 10y ago
    And anyone entering their business would have to as well. The large banks are happy to have these regulations in some ways as it makes it hard for midsized banks to grow and compete with them.
    - eru 10y ago
      Yes. Or for scrappy upstarts to compete from their garage.

aaron695 10y ago

This is the sort of comment why people vote for Trump. They made a mistake, a programming mistake no less, something many people here have done. Then fully admitted it when they found out. Yet this is them being evil? No wonder people vote against the left.

cm2187 10y ago
The other thing is with a company the size of citigroup (250,000 employees), it is statically impossible not to have: - incompetent and/or careless employees and managers - dishonnest employees - computer bugs, glitches, clerical errors If you take down a large corporation every time you find any of these, there will be no corporation left within a year. Just small companies that were statistically lucky to have neither of those that particular year. Name me a program, any program (other than Hello World) where no bug has never been found!
- eru 10y ago
  They had this bug for more than a decade. They should have systems in place to look for these things. People make mistakes, but these mistakes should be caught before they get into production. And the ones that still make it into production should be hunted.
  - cm2187 10y ago
    Should we discuss about all the 15 years old bugs that are found in Windows, Linux and MacOS which are well into production (and many of them critical bugs that affect the core of the product)? Has a software company ever been fined or held liable for bugs in its products? In fact too often, bug fixes are paid updates. Financial companies are held to extraordinary standards, and in my opinion it's a game they cannot win.
    - tremon 10y ago
      This is not a minor bug, this is a bug that caused data to be misrepresented. If you want to compare it to OS bugs, then you need to look at silent data corruption: how many data corruption bugs have gone undetected in operating systems for 15 years?

jondubois 10y ago

I was thinking the exact same thing. They should have a really thorough investigation and they need to make sure that NO ONE knew about this bug at any point in the past 15 years. If Citygroup has a habit of hiring and fostering employees who turn a blind eye and keep their mouths shut, then they should be punished severely.

eru 10y ago
If someone knew and didn't say, they should be punished. If no one knew, the managers who were tasked with setting up procedures and systems for knowing, should be punished.
- arjie 10y ago
  Dude, they fucked up. You don't have to send Judge Dredd over for this.

ryporter 10y ago

Citigroup was $7 BILLION for their mortgage fraud. [1] I think that can be considered a "real consequence." This was a far less severe infraction, and the fine was correspondingly much lower. [1] http://www.reuters.com/article/us-citigroup-settlement-doj-idUSKBN0FJ13120140714 http://www.reuters.com/article/us-citigroup-settlement-doj-i...