Unlikely. The trades that caused KCG to collapse [1] were not reversed (~$400m in losses).
Any firm worth their salt has risk systems in place to prevent runaway trading too, and those aren’t black boxes like AI/ML. They’re limits set for specific strategies or teams etc, and typically require approval from firm partners to increase past certain levels.
Collapses of firms are far more often caused by lapses in proper risk management than bugs in code. The KCG collapse looks like a bug on the surface but was ultimately a misuse of accounts that sidestepped these risk systems, so they couldn’t stop the runaway caused by the bug.
Any firm worth their salt has risk systems in place to prevent runaway trading too, and those aren’t black boxes like AI/ML. They’re limits set for specific strategies or teams etc, and typically require approval from firm partners to increase past certain levels.
Collapses of firms are far more often caused by lapses in proper risk management than bugs in code. The KCG collapse looks like a bug on the surface but was ultimately a misuse of accounts that sidestepped these risk systems, so they couldn’t stop the runaway caused by the bug.
[1] https://en.m.wikipedia.org/wiki/Knight_Capital_Group