6 ms·

"The best part is the fine: $12m, despite the resulting audit also revealing that the system was systematically sending naked shorts." Cool - all you have to d

"The best part is the fine: $12m, despite the resulting audit also revealing that the system was systematically sending naked shorts." Cool - all you have to do to get away with financial crimes is create a system with no protections against breaking the law.

judk 13y ago
This connects back to the 'autonomous corporation' being discussed on the bitcoin discussion on HN today.
- deleted 13y ago
  [deleted]
- malandrew 13y ago
  Related link for others and for posterity: https://news.ycombinator.com/item?id=6589067 https://news.ycombinator.com/item?id=6589067
notaddicted 13y ago
Yes, these criminal masterminds found a way to swindle honest hard-working themselves out of 440 million dollars and "get away with" a cool extra -12 million.
- mcphilip 13y ago
  They also amassed over $3 billion net short positions spread across 75 stocks during those 45 minutes causing significant losses to investors with stop loss positions triggered that would not have happened without Knight's erroneous trades. They didn't just harm themselves...
  - notaddicted 13y ago
    Yeah, actually now that I'm reading the SEC report it appears pretty seriously reckless, also their lack of capital thresholds.
  - lmm 13y ago
    Stop loss orders amplify market instability. People with them deserved what they got.
    - sfbsfbsfb 13y ago
      You obviously have never traded stocks and I would strongly advise against it.
  - kevinpet 13y ago
    Anyone using stop loss orders harmed themselves. It's like saying that you wouldn't have gotten hurt rolling down the steepest hill in town on a skateboard with no helmet if someone hadn't parked in a red zone.
segmondy 13y ago
Be very careful with what you are suggesting. If we are going to call them criminals because of bug in their code and system. Then don't be upset the day you are called a criminal for a bug in your code, for not having a test unit or deploying the wrong thing and not having the right process in place.
- Jtsummers 13y ago
  Having worked in the aerospace side of software dev, I'd actually be cool with this. Outside of software, real engineers have real liability when their systems fail [1]. PEs [2] are held accountable in most countries that license engineers when they sign off on things that should not have been signed off on. Too many people on the software side, even in safety critical systems, play fast and loose with the "engineering" aspect. We know how to design sound software, we know how to analyze it, we know how to test it. Deliberate, systematic approaches to these tasks can bring orders of magnitude greater confidence in the systems we produce, we just choose not to do it. Technically, in aerospace, we have DO-178C, which provides guidelines on artefacts that need to be produced, but too often these artefacts are created after the fact, rather than prior/concurrent to the development (where they belong). Criminal liability, career ruined by loss of licensure, these are risks that might actually temper some of the recklessness in the industry. [1] http://en.wikipedia.org/wiki/Hyatt_Regency_walkway_collapse#Aftermath http://en.wikipedia.org/wiki/Hyatt_Regency_walkway_collapse#... - no criminal penalties, but civil penalties and lost their license to practice. [2] http://en.wikipedia.org/wiki/Regulation_and_licensure_in_engineering http://en.wikipedia.org/wiki/Regulation_and_licensure_in_eng...
  - boxy_brown 13y ago
    You are missing an important point: different systems fail in very different ways. The reason why people will generally prefer software over other ways of building things is because the cost of failure is often very low. No one is going to die if a website serves an incorrect image, nor will such a bug require billions of dollars worth of semiconductor inventory to be recalled to repair. If every software project was run like an avionics project, software would be more reliable and of higher quality. But the world would be worse off; most of the software people use would never come into existence.
yummyfajitas 13y ago
Naked shorting is not illegal. http://www.sec.gov/spotlight/keyregshoissues.htm http://www.sec.gov/spotlight/keyregshoissues.htm
sseveran 13y ago
Naked shorting is not illegal for a broker dealer.

judk 13y ago

This connects back to the 'autonomous corporation' being discussed on the bitcoin discussion on HN today.

deleted 13y ago
[deleted]
malandrew 13y ago
Related link for others and for posterity: https://news.ycombinator.com/item?id=6589067 https://news.ycombinator.com/item?id=6589067

notaddicted 13y ago

Yes, these criminal masterminds found a way to swindle honest hard-working themselves out of 440 million dollars and "get away with" a cool extra -12 million.

mcphilip 13y ago
They also amassed over $3 billion net short positions spread across 75 stocks during those 45 minutes causing significant losses to investors with stop loss positions triggered that would not have happened without Knight's erroneous trades. They didn't just harm themselves...
- notaddicted 13y ago
  Yeah, actually now that I'm reading the SEC report it appears pretty seriously reckless, also their lack of capital thresholds.
- lmm 13y ago
  Stop loss orders amplify market instability. People with them deserved what they got.
  - sfbsfbsfb 13y ago
    You obviously have never traded stocks and I would strongly advise against it.
- kevinpet 13y ago
  Anyone using stop loss orders harmed themselves. It's like saying that you wouldn't have gotten hurt rolling down the steepest hill in town on a skateboard with no helmet if someone hadn't parked in a red zone.

segmondy 13y ago

Be very careful with what you are suggesting. If we are going to call them criminals because of bug in their code and system. Then don't be upset the day you are called a criminal for a bug in your code, for not having a test unit or deploying the wrong thing and not having the right process in place.

Jtsummers 13y ago
Having worked in the aerospace side of software dev, I'd actually be cool with this. Outside of software, real engineers have real liability when their systems fail [1]. PEs [2] are held accountable in most countries that license engineers when they sign off on things that should not have been signed off on. Too many people on the software side, even in safety critical systems, play fast and loose with the "engineering" aspect. We know how to design sound software, we know how to analyze it, we know how to test it. Deliberate, systematic approaches to these tasks can bring orders of magnitude greater confidence in the systems we produce, we just choose not to do it. Technically, in aerospace, we have DO-178C, which provides guidelines on artefacts that need to be produced, but too often these artefacts are created after the fact, rather than prior/concurrent to the development (where they belong). Criminal liability, career ruined by loss of licensure, these are risks that might actually temper some of the recklessness in the industry. [1] http://en.wikipedia.org/wiki/Hyatt_Regency_walkway_collapse#Aftermath http://en.wikipedia.org/wiki/Hyatt_Regency_walkway_collapse#... - no criminal penalties, but civil penalties and lost their license to practice. [2] http://en.wikipedia.org/wiki/Regulation_and_licensure_in_engineering http://en.wikipedia.org/wiki/Regulation_and_licensure_in_eng...
- boxy_brown 13y ago
  You are missing an important point: different systems fail in very different ways. The reason why people will generally prefer software over other ways of building things is because the cost of failure is often very low. No one is going to die if a website serves an incorrect image, nor will such a bug require billions of dollars worth of semiconductor inventory to be recalled to repair. If every software project was run like an avionics project, software would be more reliable and of higher quality. But the world would be worse off; most of the software people use would never come into existence.

yummyfajitas 13y ago

Naked shorting is not illegal. http://www.sec.gov/spotlight/keyregshoissues.htm http://www.sec.gov/spotlight/keyregshoissues.htm

sseveran 13y ago

Naked shorting is not illegal for a broker dealer.