2010 Market Flash Crash

May 8, 2010

A rogue algorithm triggered significant price fluctuations and disrupted trading in the US stock exchange, emphasizing the need for responsible AI governance and safe and secure AI practices.

This incident underscores why Project Cerebellum's AI incident database is crucial for harm prevention. By mapping this event to our HISPI Project Cerebellum TAIM (Govern), we can learn from past mistakes and implement guardrails for AI to ensure a safer financial future.
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Matched TAIM controls

Suggested mapping from embedding similarity (not a formal assessment). Browse all TAIM controls

MEASURE 2.6 — similarity 0.705, rank 1. TAIM detail and related incidents →
MAP 3.2 — similarity 0.693, rank 2. TAIM detail and related incidents →
MAP 4.1 — similarity 0.683, rank 3. TAIM detail and related incidents →

Alleged deployer: navinder-sarao, waddell-and-reed, barclays-capital
Alleged developer: navinder-sarao, waddell-and-reed, barclays-capital
Alleged harmed parties: market-participants

Source

Data from the AI Incident Database (AIID). Cite this incident: https://incidentdatabase.ai/cite/28

Data source

Incident data is from the AI Incident Database (AIID).

When citing the database as a whole, please use:

McGregor, S. (2021) Preventing Repeated Real World AI Failures by Cataloging Incidents: The AI Incident Database. In Proceedings of the Thirty-Third Annual Conference on Innovative Applications of Artificial Intelligence (IAAI-21). Virtual Conference.

Pre-print on arXiv · Database snapshots & citation guide

We use weekly snapshots of the AIID for stable reference. For the official suggested citation of a specific incident, use the “Cite this incident” link on each incident page.