A bank mistakenly transfers $ 900 million to its customers and is not entitled to recover them

A US District Court judge ruled that Citibank was not entitled to recover nearly half a billion dollars that it had mistakenly sent to the lenders of the cosmetic company, Revlon, in what was known as “one of the biggest blunders in banking history.”The bank, acting as a lending agent for Revlon, intended to send about $ 8 million in interest payments to the cosmetics firm’s lenders, but mistakenly sent nearly 100 times that amount, including $ 175 million to a hedge fund.

In all, Citibank mistakenly sent $ 900 million to the company’s lenders, some of whom returned the money while others did not, CNN reported.

And “Citibank” filed a lawsuit, last August, requesting the return of its money, but it has not yet received $ 500 million from 10 investment advisory companies after the wrong transfer.

The law usually penalizes those who mistakenly spend deposited money into their accounts, and unintended transfers are common in the digital age and can be recovered instantly. A Pennsylvania couple faced criminal charges after spending money mistakenly deposited into their account.

But New York law has exceptions to this rule, and if the recipient is owed the money, and he does not know that it was connected in error, he can keep it. Revlon’s lenders said they believed Citibank was making prepayments for a loan.

After all, the money transferred in error was the exact amount that the bank owed to its lenders, even though the loan had not been due for repayment for some time.