This story from Slashdot sounds right out of a B grade sci-fi movie, with bots and crawlers wreaking havoc, where a highly interconnected system has gone awry due to a minor glitch.
WSJ reports (http://online.wsj.com/article_print/SB122100794359017593.html ) that Google News crawled a 2002 article when United Airlines was on the brink of bankruptcy. Google News ran the story as today's news, automatically. The story was then picked up by other news aggregators and eventually headlined as a news flash on Bloomberg. This triggered automated trading programs to dump UAL, and the stocked tanked from $12 to $3 wiping out $1.14 billion from the market cap. The stock recovered within the day to $10 and is now trading at $9.62, a market cap of $300M less than before Google ran the story.
Is anyone liable here ? Tribune for omitting the correct dateline, Google for not writing software that erred on the side of caution in the case of a missing date, Bloomberg and other syndicators for not vetting their sources, or traders who haven't put "circuit breakers" in place for preventing such a mishap. Clearly automated trading programs will see some specific requirements imposed, by reguatory bodies, for having some "manual" mechanisms in place for such freak events.
The investors are reeling under the shock, including retail investors. For a flavor of what the retail investors are talking check out
Vijay
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For an update on this story follow the forbes investigation on this link http://www.forbes.com/2008/09/08/ual-tribune-bankruptcy-biz-media-cz_ja_0908ualstory2.html
But in a nutshell this looks like a human oversight as well with a reporter from a florida based investor information service assuming that the news was latest purely because of its co-location with other current stories. This has the potential of creating a big challenge for the credibility of news aggregators with hackers/crackers on the prowl.
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