Citation
In the Matter of Knight Capital Americas LLC: Order Instituting Administrative and Cease-and-Desist Proceedings
TL;DR
Software deployment error affected primary trading servers
Official SEC findings on Knight Capital's August 2012 software failure causing $440 million loss in 45 minutes. Demonstrates that redundancy adds complexity that can create new failure modes - automatic failover to unsynchronized backup systems caused catastrophic losses that wouldn't have occurred without the redundancy system.
Key Findings from Commission (2013)
- Software deployment error affected primary trading servers
- Automatic failover shifted trading to backup with outdated software
- $7 billion in unintended trades executed in 45 minutes
- $440 million loss bankrupted 17-year-old firm