Flash Crash Caused by Citi's London Trading Desk

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The London trading desk of Citigroup Inc. caused a flash crash in Europe, sending shares tumbling after a sudden 8% drop in Swedish stocks.

One source said a large erroneous transaction by the U.S. bank's London trading desk triggered the sell-off. A five-minute selloff in the OMX Stockholm 30 Index shook markets from Paris to Warsaw, knocking the main European index down by 3% and wiping out 300 billion euros.

Citi declined to comment.

While the cause of the brief slump was unknown, a Nasdaq Stockholm spokesman said it wasn't a technical issue. “Our first priority was to eliminate technical issues within our systems, followed by an external attack. ”We have now excluded both, said David Augustsson of Nasdaq Stockholm.

The OMX Stockholm 30 Index fell 1.9%, roughly in line with European markets.

Nasdaq has stated that it will not cancel any trades made on the Nordic markets due to the error.