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Who to Sue When a Robot Loses Your Fortune

• onion2k 7y ago
  Robots don't just spring in to existence from nothing. Someone made the decisions necessary to make the robot do the work they're selling (even if that's just deciding what training data and biases to feed in to something they choose to call AI). You can sue that person.
  • koltax 7y ago
    Yeah, seems like a click bait. You sue the owner, as he did.
    • fatnoah 7y ago
      Definitely click bait. The real title wouldn't be as interesting. "Who to sue when an algorithm doesn't work the way you were told it did?" That makes the answer very obvious. You sue the person that misrepresented what the algorithm does, which is indeed what is happening here.
  • steveeq1 7y ago
    20 years ago, when I described open source software to a lawyer, I got that exact same question. I told him, well, you can sue the developer I suppose, but he doesn't have very much money. The lawyer responded "well, I don't feel comfortable using software where there is no accountability". Looking back, this seems like a silly argument that most people don't follow in any meaningful way in this day and age. In the end, people will use whatever software has a good reputation. If something bad happens, well it's on them. The sky didn't fall using this model.
    • Darkstryder 7y ago
      One could argue that 20 years ago there was little to no reputation (good or bad) for most open-source software, and that made using open-source software much more dangerous : it was more difficult to separate the good apples from the bad ones. Therefore his criticism made sense at the time. While open-source code and open-source maintainers are critical parts of the ecosystem, I think open source users are underrated. If nobody shared their experience about how a piece of open-source software is actually behaving once you put it to use in production, open-source software would have much less value than it currently has.
      • steveeq1 7y ago
        No, open source has been a "thing" for quite some time even in 1998. No, the guy just didn't get it. He asked questions like who do you sue if something goes wrong. . . where is the market incentive to create software if there is no strong intellectual property rights. . . what if someone steals the code and makes a million dollars. . . What if the original author dies starving while some rich corporation takes advantage? I mean, really silly arguments when you look back. I told him that most of the software using this model is simply more reliable than proprietary software, but he just didn't get it. There was already plenty of "reputation" even back then, he just wasn't a hacker and couldn't understand any other perspective other than his own.
        • eropple 7y ago
          > What if the original author dies starving while some rich corporation takes advantage? I mean, really silly arguments when you look back. The evolution of open source software in the twenty years hence suggests that this particular question is not as silly as you frame it.
          • steveeq1 7y ago
            No, open source software has been a regular thing since the 1980's and arguably with 1970's with richard stallman. It was already 20 years old by the time I was explaining it to the lawyer. He was just unable to understand anything that wasn't part of his paradigm.
            • eropple 7y ago
              Being "a regular thing" and being "a thing that enriches companies off the backs of community-minded software developers" are not concepts in conflict.
        • Darkstryder 7y ago
          "The future is already here — it's just not very evenly distributed." You're right that open source had been a thing for quite some time in 1998. GNU was started in 1983 after all. But I respectfully disagree that open source was "obvious" in 1998. Hell, at that time, one could argue it was not obvious for a lot of people how much the Internet and computers would alter our lives. Open source was the least obvious part of quite a few a mind-bending paradigm shifts.
    • middleload 7y ago
      I'd argue that the same is true today. No big org is using pure OSS. They have big contracts with Redhat and the likes and they like to pretend that they're covered.
      • nradov 7y ago
        It's not just pretend. If the big org finds a defect and opens a support ticket, Red Hat will actually fix it.
        • tremon 7y ago
          Yet if the big org loses money due to said defect, the supplier will not reimburse that. No matter if it's Red Hat, Microsoft, Oracle, IBM, or Google.
      • bluGill 7y ago
        You always pay for all software in time. Someone needs to install the software in your company. Someone needs to answer support calls. If you pay RedHat when your people can't figure it out they can turn to someone else - a specialist (You hope: Redhat has a good reputation but there is always risk it is just someone else who knows less than you and will take more of your time understanding the problem than to just figure it out yourself.) My CEO could do my job. He would need an additional degree in programming, and even more time in a day. He hires me because telling my bosses bosses (skip several levels) boss to get something done will go down the chain into figuring it out how to go from we need to grow market share in the area I'm working to actual code that will grow that market share. This across thousands of employees - the CEO could learn to do any one but he can't do all of them.
      • sonnyblarney 7y ago
        "No big org is using pure OSS" On the contrary every big org is using OSS. OSS is in everything. That there is 'nobody to sue' is besides the point, it's like suing the inventor of the fork because something happened with a fork. If you bought something complicated from someone with a contract and you depend on it doing ABC and it doesn't, then there's a case of liability. But tons of software is OSS and there's nobody to sue. 'Liability' in software is maybe important in some areas, but mostly it's not.
    • jnty 7y ago
      This is wrong on a higher level too as most commercial software will disclaim all liability for the correct operation of their software unless you pay them lots of money for a support contract. Turns this is just as viable a business model for OSS too, as Redhat and others found out.
    • hinkley 7y ago
      Society is full of algorithms that have a good reputation that they don't deserve. Most of our problems as a society are due to that gap.
  • rfugger 7y ago
    You sue whoever misrepresented the robot's capabilities to you. There's nothing wrong with making a robot that's bad at trading. There is something wrong with pretending it's not bad at trading when you're selling it.
    • hammock 7y ago
      What if that person didn't fully understand how the robot worked? The best your could hope for is negligence
      • rfugger 7y ago
        If they didn't fully understand how it worked, but fraudulently represented that they did, they'd be on the hook. It all hinges on what he was promised when he bought it. If they had a good disclaimer, then he might be out of luck.
      • onion2k 7y ago
        There are places where adopting AI is going to be difficult for this reason - notably anywhere that has a legal requirement to explain why a decision went a particular way. That includes things like insurance risk models, pension investments, etc.
        • bumby 7y ago
          In these cases, I wonder if it would cause a movement toward more interpretative models with more mathematical backing. For example, if not being able to explain a model leaves an organization open to litigation, they may instead rely on statistical based learning methods even if they performed less well.
        • cosmodisk 7y ago
          The losses made by software training may be the least problem for the institution.If case goes to court,they may be required to reveal the reasoning behind software's decision and that means going through the code,as all that marketing bs called AI is just a trading algorithm trained on some datasets. No company would want to reveal the code.
  • hammock 7y ago
    We're already seeing companies shirk responsibility of their automated processes. The censorship by social media is a prime example. When somebody complains that Twitter shadowbanned them, Twitter will point the finger at the algorithm and say they couldn't help it, it's not what it looks like, it's just the algorithm. For the time being, they often go back and give posts and accounts a manual second review, and often reverse the decision. For now, that keeps the general conversation around this issue from going too far. But it can't last.
  • IceWreck 7y ago
    Why? The software did it was supposed to do. It doesn't guarantee profits. There's a risk involved. If anyone should be sued, its Costa (Captain Magic/con-artist/salesperson/whatever) who, if what the investor claims is true, greatly oversold the capabilities of the software. And even then there might not be a strong case against him.
    • ErikVandeWater 7y ago
      The only thing that matters is what's in the contract. It doesn't matter if Costa said it worked using gnomes living inside the computer.
      • IceWreck 7y ago
        There's no way the T&C doesn't have a clause about the creators not being responsible for the trading bot's actions.
        • diminoten 7y ago
          The real article should have been, "Is the liability limitation clause enough?"
      • wbl 7y ago
        Yes it does. That's a material misrepresentation and hence fruad.
• snek 7y ago
  He should sue himself for going into high risk/velocity trading in the first place.
  • wccrawford 7y ago
    To me, this is the right solution. Someone might have persuaded him into the decision, but he's the one that made that decision in the end. You shouldn't be making decisions like this if you don't understand the risks.
  • mruts 7y ago
    Li Kin-Kan is what is called "dumb money."
  • deleted 7y ago
    [deleted]
• jamisteven 7y ago
  Answer: The person responsible for creating the decision making logic behind said robot.
• mschuster91 7y ago
  > "That may often be true, but when it’s not, or when they quickly go astray, investors want someone to blame" Uh... don't get me wrong, but when you go to the casino and lose all your money, it's no one's fault but yours. Same way for stock markets. Whoever is dumb enough to put money into essentially a gambling algorithm should be able to pay for the losses himself.
  • daniel-cussen 7y ago
    No not the same way for stock markets. It's not a statistical certainty that you will lose money like gambling in a casino is, and millions if not billions of people depend on the markets in order to invest for retirement. There are people who are certified stock brokers and certified financial advisors who have a legal fiduciary duty to maximize returns and minimize risk on their client's behalf.
    • mschuster91 7y ago
      > It's not a statistical certainty that you will lose money like gambling in a casino is But it is a very real possibility as the recent financial crisis shows. Everyone who is unable to stomach a total loss of his investment in one basket should not do so, and it is double dumb to invest in unproven automation like this.
  • mruts 7y ago
    Wait, so you keep all of your money in cash? Because that's... a terrible idea.
    • mschuster91 7y ago
      Which money? I live in Munich, how in earth am I supposed to save anything for retirement with the exploding rents?
• coldcode 7y ago
  Salespeople often exaggerate to make a sale, it's not uncommon. Believing them with enthusiasm is a sign of someone salespeople love to find. This guy is right to sue but he's still a sucker who was taken in and then leveraged himself to the hilt based on a pitch he could not (or would not) verify. A prudent person would have tested it with a small amount to start with.
• eyeundersand 7y ago
  "People tend to assume that algorithms are faster and better decision-makers than human traders,” said Mark Lemley ... “That may often be true, but when it’s not ..." Is it just me or is that quote kind of disingenuous? "People tend to assume" and "That may OFTEN be true" make it sound like it isn't as clear cut or there's still doubt over whether such algorithms outperform humans. Is that truly the case? I don't know much about trading but aren't algorithms doing most of the trading now?
  • Nasrudith 7y ago
    The faster part is certainly not a matter of debate. The better less so and it depends a lot on the area. High Frequency Trading they essentially dominate and given what I heard also really prove their role's legitimacy as arbitrage as more HFT bots drove down the margins in a move towards uniformity - just like arbitrage should. They are prone to some occasional "dumb" errors however - like humans but different those which attempt to predict trends using feeds like Twitter have caused losses as they fail to get the context. And it depends on the area and how you define algorithm and trading. Your bank has lists of requirements for mortgages beyond legal minimums - essentially already following an algorithm but due dilligence involves humans in the loop.
    • eyeundersand 7y ago
      Thank you for the insight! Much appreciated.
• mrhappyunhappy 7y ago
  It’s amazing that people with that kind of money would be persuaded into paying millions in fees thinking they can beat the index.
  • mruts 7y ago
    What is "the index?" The S&P 500? The FTSE 250? The Nikkei? The Russell 2000? The Russel 3000? The risk-free rate? LIBOR? When you make statements like this, they mean nothing at all. Let's say you're talking about the S&P 500. Many hedge funds have been beating it for 20 years or more. But let's say you had 2 Billion dollars. What would you do with it? Are you telling me you would put it all in one index fund? Maybe you would put it in a couple, maybe you would put it in some bonds? Well guess what, you just made an active management decision! You decided what index, or what bonds, or whatever. There is no such thing as passive management.
    • hammock 7y ago
      Where do you put your money and has your portfolio beat the S&P 500 over the last 10 years?
    • cubano 7y ago
      According to Vanguard, over 85% of actively traded funds don't beat the S&P 500, and it's quite possible the one's that do are simply lucky, as in any random distribution there will be a small percentage, of course, that are over 2SD on the profit side. 2bil is so easy. Highly rated tax-free munibonds...a very safe 3% coupon will net you completely tax-free 60mil/yr...I would say plenty to live off of and even reinvest.
      • kurtisc 7y ago
        So 'the index' is S&P 500? What about Nikkei 225, how many beat that?
    • soVeryTired 7y ago
      > Many hedge funds have been beating it for 20 years or more Relatively few, I would say, if you measure it by realised Sharpe. Rentech, Brevan Howard, D.E. Shaw, and maybe AHL and Winton excluding the past few years. I'm struggling to name others that have done well over a sustained period. There are a lot of funds out there, and IMO much of the supposed 'outperformance' is a combination of leverage and survivor bias (I say this as a former hedge fund quant).
• mruts 7y ago
  It seems like this hedge fund was run by people who didn't understand finance in the first place. This is how many quant funds work: 1.You develop an alpha factor that you believe is associated with out performance. 2. You control risk factors such as beta, volatility, Fama French 3 factor, etc. 3. Now you create a neutral L/S portfolio that only has exposure to your alpha factor while also negating the risk factors like beta and volatility. 4. Backtest it, run a paper portfolio for awhile, etc. 5. Combine your new alpha factor with a bunch of other factors that you have already developed. The idea being that layering these alpha factors on top of each other will negate some of the noise inherent to each factor. 6. Make money and cycle out and in alpha factors for as long as they work/don't work. It seems like this "hedge fund" was solely trading based on sentiment without creating a L/S market neutral portfolio or layering on any other factors. This is a very bad idea. The quote from the guy who made the software is pretty damning: "The signals we have been provided have a strong scientific foundation. I think we did a pretty decent job. I know I can detect sentiment. I’m not a trader." This is a big red flag. A lot of AI/ML people have this arrogance that trading is easy and that you don't need any financial knowledge to make money. Maybe that was true in the 1980's, but at this point, it requires an incredible level of expertise to generate and implement profitable quant trading strategies. But all of this is off-topic, to get to the point: the Bloomberg article is garbage click-bait. You sue the General Partners, and I don't think anyone is confused about this.
  • pbhjpbhj 7y ago
    >Maybe that was true in the 1980's, but at this point, it requires an incredible level of expertise to generate and implement profitable quant trading strategies. // Are you saying there is no luck in the market any more? Doesn't that mean it's deterministic; and doesn't that mean that market trading is unnecessary as we can allocate needs perfectly?
    • nradov 7y ago
      It's not deterministic. When it comes to achieving high returns luck is more important than ever! The public markets have become more efficient and so it's now harder to win based on skill. Most of the funds which have reported high returns are actually just rolling the dice and hitting a lucky streak; the ones that lose big get shut down quickly and you never hear about them. Active traders are trying to find mis-priced securities (market inefficiencies). That used to be relatively easy for smart people who could think up a few key insights. But now there are so many quant funds deploying fast computers and legions of mathematicians that most new strategies stop working quickly. The act of making those trades drives out inefficiencies. Market trading is still necessary for liquidity to minimize the cost of capital.
• DoofusOfDeath 7y ago
  Pedantry: "Whom to sue", not "Who to sue". (Pedantic tl;dr: I refuse to put the punctuation inside the quotes. I consider that an outright bug in English and it needs to be stamped out by rebellion.)
  • gerbilly 7y ago
    If you want a bug in english, then how about: "Petting Dave's cat", "Going toMartha's Vineyard", "Using its eyes." (no apostrophe) What a stupid idea to make "it's" stand for "it is"
    • pwinnski 7y ago
      "Using his eyes," "using her eyes," and "using its eyes" have a certain parallelism. Comparing proper nouns to pronouns has more problems than a missing apostrophe: note the lack of capitalization in the pronoun. Horrors!
    • jfk13 7y ago
      Not a bug, IMO. In general, we have separate individual words for possessive pronouns; we don't create them by adding the possessive suffix to a nominative pronoun: I -> my (not I's), you -> your, he -> his, she -> her, it -> its, etc. "It's" is just the standard use of apostrophe to indicate a contraction.
    • DoofusOfDeath 7y ago
      Regarding the apostrophe for possessive nouns in English, I came across this: [0] [0] https://www.merriam-webster.com/words-at-play/history-and-use-of-the-apostrophe https://www.merriam-webster.com/words-at-play/history-and-us...
  • PeCaN 7y ago
    programmers must be stopped
• vectorEQ 7y ago
  I'm glad it's not possible to Sue in my country. Saves a lot of silly nonsense and has people a bit more responsible about their actions instead of doing random shit and sueing willy nilly when the shit hits the fan
  • lordfoom 7y ago
    Serious question: how do handle broken contracts, malicious acts, etc?
    • ionised 7y ago
      Pistols at dawn.
    • Kiro 7y ago
      In Sweden you can only sue in civil cases where there's a real disagreement, not because someone spilled coffee on you. Not sure if it would be applicable in this case though. We often hear about the crazy lawsuit culture in US anyway and how insane it is. Whether that is true or not I don't know.
      • C1sc0cat 7y ago
        Throwing hot coffee over someone would that not be covered then ?
      • chki 7y ago
        But tort law does exist, right? So if somebody purposefully spills boiling hot coffee over you, you will be able to sue them. The claims are just less outrageous than in the US because there are no punitive damages for example.
  • chki 7y ago
    Which country do you live in?
    • deleted 7y ago
      [deleted]
• duiker101 7y ago
  If it was bug that caused him to lose money, sure, he should be compensated by the company that made/owns the robot. But he says that it's capabilities were misrepresented, so the robot doesn't actually have fault, he either just made a bad investment or was scammed.
  • elliekelly 7y ago
    It usually works the other way around. A bug in the code doesn't often rise to the level of negligence. (Though 99.99% of the time a fund will reimburse a loss caused by a buggy algorithm for customer relations reasons they aren't obligated.) Misrepresenting the capabilities/returns of a strategy is where fund salespeople get themselves into trouble time and again. It's perfectly legal to sell a terrible investment strategy so long as you've been truthful.
• sonnyblarney 7y ago
  There is no new ethical dilemma here. Software has been around for a long time.
• tomkaos 7y ago
  If my microwave oven burn my pop corn, I don't sue the microwave oven. The product (robot) is not what seller tell you : you sue the seller. The product (robot) has a defect : you sue the maker.
• SmellyGeekBoy 7y ago
  If I buy a chainsaw and accidentally cut my finger off I wouldn't assume that I have any legal right to sue the chainsaw manufacturer or the person who sold it to me. At least not where I'm from - is this not the case in the USA?
  • FussyZeus 7y ago
    A more fitting metaphor along this line would be if you bought a chainsaw-weilding robot and directed it to cut down some trees, and it instead cut off your finger. Once a product has agency and is making decisions of its own accord, if it makes the wrong decisions, I don't think it's unreasonable to say the person who programmed it has some level of responsibility, likely some kind of negligence.
    • rytill 7y ago
      You really can’t pin anything like this on a single person, as tempting as it may be. The company that sells a product should deal with the consequences and accept responsibility as a complete unit. If someone coded something and somehow the bug eluded understanding all the way up the chain, it’s everyones fault for not putting more “solidness” pressure all the way down.
      • FussyZeus 7y ago
        Yeah you’re right, poor wording on my part. Agree.
  • maxlybbert 7y ago
    Theoretically, that’s how it works in the US, but not in practice. Years ago, I noticed that my kids’ inner tube had multiple disclaimers, including multiple English disclaimers. The disclaimers next to the Union Flag, Australian Flag, and Canadian Flag were “use under competent supervision.” The disclaimer next to the US Flag was much longer and more detailed (“use under adult supervision” [note that is different from “competent supervision”], “do not tow from boat,” “do not use when drunk,” “do not dive into”, etc.). It did not make me proud to be American. Additionally, many states have the concept of “joint and several liability,” so that if multiple parties share responsibility for an accident, the victim can collect the full amount from any of them and the perpetrators are expected to pay each other appropriately. The end result is that, generally, the company with the deepest pockets pays the full amount and then hopes to collect from the other parties later. So, the answer is that you sue the chainsaw manufacturer, the chain manufacturer, the landowner, etc. and hope that they settle or that you get a final judgement that you can collect from the richest one, even if that particular party is held to be, say, 1% responsible.
• driverdan 7y ago
  The whole framing of this case is incorrect and stupid. It doesn't matter if the software used for trading is a bunch of if statements or machine learning, it's still just software. If it's misrepresented the case is pretty straightforward. The algos used don't matter.
• plouffy 7y ago
  This is an important aspect: > Over the following months, Costa shared simulations with Li showing K1 making double-digit returns, although the two now dispute the thoroughness of the back-testing. And I wished the article linked to the fillings or at the least discussed this more thoroughly.
• raviolo 7y ago
  What if the robot was written by another robot and a “salesperson” was also a robot?
  • djsumdog 7y ago
    We obviously didn't have enough bullshit jobs for human beings, so we're gonna create some useless robots as well. It makes me think of Futurama with all the worthless robots (Preacher Bot, Robot Devil, Homeless Bot), which were finally explained after the show came back as the robots self-reproducing.
  • DonHopkins 7y ago
    Wasn't there a Philip K Dick story about a human computer programmer in the future where robots were taking over all the good programming jobs, who had to pretend to be a robot, in order to get the high paying robot-only programming gigs? Every morning when he signed in to work, he had to fail a Turing Test in order to prove that he was really a robot.
• thesausageking 7y ago
  The founder/CEO of the company that built the trading system had previously "agreed to pay $17 million to the U.S. Securities and Exchange Commission to settle charges of defrauding investors at his mobile-payments company, Jumio Inc." How could you trust him to trade $2.5B?
• blunte 7y ago
  If you're an accredited or institutional investor, then you have only yourself to blame (unless the investment was misrepresented, in which case it should be the one who sold/brokered the investment). In this case, the investor was foolish to believe that a magic AI system could generate reliable positive returns. At the same time, it sounds like the performance of the system was misrepresented. Either way, if you're responsible for 1bn of assets, you better do really good homework.
  • username444 7y ago
    This. Investing is not a guaranteed return system. You might win, or you might lose all your money. At the end of the day, the only person who is responsible for it is you. Don't want to lose your money? Don't invest.
    • twblalock 7y ago
      > At the end of the day, the only person who is responsible for it is you. There are rules about fraud and fiduciary duty and disclosure which make blanket statements like this incorrect.
      • deleted 7y ago
        [deleted]
      • blunte 7y ago
        I think the point is, an experienced investor should be able to either see through a fraud or at least do proper due diligence before investing a large sum. Plus, institutions often make a small initial test investment. If the performance is as expected, risk considered, then they may make the big investment. A retail investor can't be expected to properly research claims, but a professional should be.
    • paulddraper 7y ago
      > At the end of the day, the only person who is responsible for it is you. Sigh. Unless you're too big to fail in 2008.
• deleted 7y ago
  [deleted]
• crankylinuxuser 7y ago
  Who do you sue when a factory machine smashes your hand? The factory owner.
• Mikeb85 7y ago
  Forgetting who's responsible for trading losses (the customer should know investing is never a sure thing), this sounds like a very crude algorithm. The best trading programs don't use machine learning and sentiment scraped from the internet, they use well defined strategies that are set by a competent human. The whole point of using AI is to use it for tasks humans aren't suited to; we're far better than machines at gauging sentiment over days and weeks. Computers are better at seeing numerical trends over shorter time periods, or identifying lesser known securities based on trading signals. Using a computer to try timing a major benchmark seems like a massive waste of time.
• DonHopkins 7y ago
  Should have bought Old Glory Robot Insurance! https://www.youtube.com/watch?v=KXnL7sdElno https://www.youtube.com/watch?v=KXnL7sdElno
• landryraccoon 7y ago
  Maybe the concept of blame is meaningless when it comes to robots, and we’re clinging to a cultural and spiritual concept of blame that serves no purpose when it comes to robots. If a robot doesn’t function properly, you fix it or take it out of service. Taking retribution against a robot (or abstractly, the civilization that created it) is of questionable value. The right question is how do we build robots that don’t lose fortunes? The fact that human beings get angry at robots and want retribution or recompense for malfunctions is an evolutionary adaptation for dealing with other humans. It is useless when it comes to dealing with non sentient deterministic agents. Sure, if the robot was being controlled by a human, go after the human. If not, what’s the point?
  • rout39574 7y ago
    This cannot work as a practical matter. If a person is killed by a robot, it is important to have a legal theory to understand some analogue to "the responsible party". Otherwise, the introduction of a "robot" in the workflow becomes a wildcard to evade torts of all sorts.
    • Haga 7y ago
      Eh, it already is. We call those legal golemns companies.
      • markovbot 7y ago
        Which is a problem we should not just accept, but do something about.
    • landryraccoon 7y ago
      If the goal of the legal theory is to reduce human deaths by robots, why not just reduce human deaths by robots by dismantling or repairing the appropriate robots? Again, the legal theory works because when dealing with human beings you have to assign responsibility to human beings. Hurricanes and earthquakes kill tons of human beings and there’s no legal theory of responsibility. We simply work as a society to minimize those deaths without blaming anyone.
• cosmodisk 7y ago
  It depends on what basis algo trading was sold to the customer. Regardless of whether it's a human or computer, anyone willing to give such an amount a go, should be asking how risk is beimg hedged?What happens when shit hits the fan? How fast can you exitvthe position?If it's Forex, what stops are being used to minimise the losses and etc. I'm sceptical that either sides signed the deal without firstly going through some details on how it works, the risks and rtc.Also,the legal department probably did their homework to cover as much as possible in such cases. The responsibility, ultimately,falls upon the institution utilising the software and not the software itself.
• chrischen 7y ago
  I don't get the whole issue with the who to blame conundrum when it comes to robots or AI. They're just glorified buttons, pressed by a human.
• Haga 7y ago
  The guild of the guilty?
• mring33621 7y ago
  I'm sorry but this sounds like a couple idiots with too much money. "Li eventually let K1 manage $2.5 billion—$250 million of his own cash and the rest leverage from Citigroup Inc." Leverage = Loan r/wallstreetbets is that-a-way.
• jandrese 7y ago
  That title is pure 1%er American.
• vorotato 7y ago
  Obviously it's whoever misrepresented the abilities of said robot. If that's nobody then you don't have a case.
• kyrieeschaton 7y ago
  This is a straightforward dispute about to what extent the backtested performance claims were accurate, and whether the fund was following the strategy as declared to its client. The fact that it's a "robot" is irrelevant to the dispute - the same fact pattern would apply to a human fund manager.
• zaphirplane 7y ago
  Clearly depends on the laws of the nanny state you live in. In my nanny state, the government will appoint a team of therapist to mange the trauma, we get mandatory employer 4 weeks paid pain and suffering leave. The government refunds your loss plus potentially lost opportunity cost In the country next to us, they are savages. Can you believe each adult is responsible for the consequences of their decision They have some meager protection for fraud and general exploitive behavior. But if it’s a legitimate investment firm and you go in knowing what you are doing and they loose your money THAT IT your money is lost. savagery Edit: post is tongue in cheek, assuming there is no fraud some of the comment suggest there could be subtle fraud involved
• rajacombinator 7y ago
  10x leverage on a fantasyland AI magic machine. Might as well sue the casino when you lose playing baccarat. (And people do sue.)
• Hasz 7y ago
  Haha, let the algo decide the stop-loss, genius. This guy was sold on a fancy robo investor that couldn't beat VTSAX if had twice as much money to start with. If you don't know who the idiot is, it's you. The dudes who put this thing together were using a theory from, get this, 2015, to do sentiment analysis. Cool 4 character domain, but they couldn't even be assed to get a let's encrypt cert for it -- why would you trust them to manage billions? http://42.cx/ http://42.cx/ The number of buzzwords is both overwhelming and inherently fishy.
• LaserToy 7y ago
  I'm surprised with comments that puts all the blame on the investor and make the impression that authors never do similar things (rely on systems they don't fully understand). The thing is, software is all around us, some is more or less harmless (web browser) and some can create a lot of damage (self driving car, buggy aircraft controller, bank software). The thing is that we generally have absolutely no clue what is the quality of the piece of the code that is controlling our destiny right now. What if the airplane we are flying right now decides to dive? What if bank looses all our record? What if Nest thermostat goes crazy and burns thousands of dollars on heating during your vacation? What if your 401k disappears because of the obvious bug in the bot's script? I can go on and on. To be able to live in this world without going nuts we have to trust that those systems are correct and if something goes wrong we do need a legal way to punish responsible party (if there is a fault on their side). The weird thing is that we still treat software and real engineering differently. If you enter the bridge that collapses under you feet because it is a bad design - you will sue. But if you trust a company that sells a superhuman trading bot which makes silly decisions and loses your money -> it is your problem. Following this logic - don't step on the bridge without reviewing the design and making sure it is safe.
• apherbert 7y ago
  See AP Herbert Haddock v. The Generous Bank Ltd, Computer 1578/32/W1, the Magical Electronic Contrivances Ltd, and the Central Electricity Board: Reign of Error? – 13 February 1963