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(NEXSTAR) – Citibank will not get back the nearly $ 900 million it accidentally sent to lenders, a U.S. district court judge ruled.
In August, Citibank planned to transfer around $ 7.8 million to lenders to make-up brand Revlon.
According to the court ruling, it “instead made one of the biggest mistakes in banking history: it falsely transferred almost $ 900 million in its own money in addition to Revlon’s $ 7.8 million”.
The full loan payment – of $ 1.8 billion – wasn’t due until 2023. According to the court ruling, “human error” was responsible for the error.
Despite the mistake, the judge decided, the lenders can keep the money.
While the law typically treats “failure to return funds in error” as “unjust enrichment or conversion,” New York law provides an exception to the rule.
According to the court ruling: “The recipient may keep the funds if he pays a valid debt, the recipient did not provide false information to initiate the payment, and the recipient did not notice the mistake.”
The defendants in the case included ten investment firms. They received over $ 500 million in erroneous Citibank remittances.
Citibank said in a statement: “We strongly disagree with this decision and we intend to appeal. We believe we are entitled to the funds and will continue to seek full recovery of these funds. “
Shared in a statement with ReutersLenders’ attorneys said they were “extremely pleased” with the verdict.
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