ITM 102 Chapter Notes - Chapter 8: Ryerson University

• School: Ryerson University
• Department: Information Technology Management
• Course: ITM 102
• Professor: Franklyn Prescod

Document Summary

Case 8- the flash crash: a new culprit. Case study question answers: the issue was that there were flaws in the system and logistics in the algorithms which carried out the trade. As an electronic system, all transactions were handled and processed by the algorithm. When the algorithm (high speed trader programs) became overwhelmed with the complexity of the order requests, it failed to process transactions properly. Jones stock exchange should be held accountable and should be forced to implement changes in the system and improve the technology being used in the electronic system. Organization: it had previously come to the attention of the stock exchange that sarao was potentially engaging in illegal trading activities, however, they allowed him to continue to do so because they could not find hard evidence against him. In the years after the aftermath of the flash crash, the organization was finally able to take action after a whistleblower came in with hard evidence.