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Comment by neomantra | Hacker News Reader

[In 2013], "Agents" caused Knight Capital to lose $450M in 45 minutes [1]. Implemented by humans and effected by computers, in the end it was really because of two reasons:

* multiple levels of inappropriate controls and unintended consequences in several complex systems

* the inability, both politically and technically, to turn it off

[1] https://www.sec.gov/files/litigation/admin/2013/34-70694.pdf

EDIT: Comments indicated I was confusing, so I added a date to make clear that this is pre-LLM agents. My apologies, I intended to illustrate parallels and the post-mortem so we can learn from it.

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Your link is from 2013. You're intentionally using the term "Agent" to muddy the waters. Don't do that.

Edited for clarity, thank you. I wasn't trying to muddy the waters (doesn't mean I didn't), it's a term I've used for a long time. I did mistakenly think the quotes would help disambiguate. I don't know what Knight called them; the first S in "SMARS" is Smart.

This confused me at first, so adding a tiny bit of context: The agents referred to here have nothing to do with AI Agents, and the linked report is from 2013.

Not directly relevant to the post being discussed, except as an example of how runaway automation can lead to unintended and large harmful consequences.

Thanks for the feedback, I have edited to not confuse.

I considered it relevant as it involves the algorithmic/computing implosion of a 17-year-old market making company, in the young field of electronic trading agents, with heavy regulation Federally (SEC) and industry self-regulation (FINRA), which includes compliance and audits. Mandatory pre-trade rules such as 15(c)3-5 were less than 5 years old then and even more regulation came out of that incident.

The article is calling for embedding, controls, and regulation in LLMs. Understanding how the same processes utterly failed a decade ago might be useful in understanding how to proceed.

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