The dilemma of a trader: who should sue when a robot loses millions?

NEW DELHI: Robots Get More Humanoid Every Day, But They Still Can't Be Persecuted. So A Hong Kong Tycoon Does The Next Best Thing. He Goes Looking For The Seller Who Persuaded Him To Entrust Part Of His Assets To The Supercomputer, Whose Transactions Cost Him More Than $ 20 Million.

It's Samathur Li Kin-kan, Whose Father Is A Major Investor In Shaftesbury, Real Estate Owner In London, Against Raffaele Costa, Who Has Spent Much Of His Career On Selling Investment Funds. It Is The First Known Case Of People Going To Court About Investment Losses Caused By One Robot And Throws The Spotlight On The" Black Box" Problem: If People Don't Know How The Computer Is Making Decisions, Who's Responsible When Things Go Wrong?

" People Tend To Believe That Algorithms Are Faster And Better Decision Makers Than Human Traders," Said Mark Lemley, A Law Professor Stanford University ." That May Often Be True, But When It's Not, Or When They Quickly Go Astray, Investors Want Someone To Blame."

It All Started In March 2017 When 45-year-old Li, First With Costa, The 49-ye Ar-old Italian Who's Often Known By Peers In The Industry As" Captain Magic." Costa Described A Robot Hedge Fund His Company, London-based Tyndaris, Would Soon Offer To Manage Money Entirely Using Artificial Intelligence (AI).

42.cx, The Supercomputer Named K1 Would Combine Through Real-time News And Social Media To Gauge Investor Sentiment And Make Predictions On US Stock Futures. It Would Then Send Instructions To A Broker To Execute Trades, Adjusting Its Strategy As It Learned More.

Costa Shared Simulations With Li Showing K1 Making Double-digit Returns, Although The Two Now Dispute The Thoroughness Of The Back-testing.

Li Eventually Let K1 Manage $ 2.5 Billion - $ 250 Million Of His Own Cash And The Rest Leverage From Citigroup. The Plan Was To Double That Over Time.

But Li Became Unhappy With K1 Almost As Soon As The Computer Started Trading In Late 2017. By February 2018, It Was Regularly Losing Money, Including Over $ 20 Million In A Single Day, Which Li's Lawyers Argue Wouldn't Have Happened If K1 Was As Sophisticated As Costa Led Him To Believe.

Li Is Now Suing Tyndaris For About $ 23 Million For Allegedly Exaggerating What K1 Could Do. Lawyers For Tyndaris, Which Is Suing Li For $ 3 Million In Unpaid Fees, Deny That Costa Overplayed K1's Capabilities. They Say He Was Never Guaranteed The AI ​​strategy Would Make Money.

The Legal Battle Is A Sign Of What's In Store As AI Is Incorporated Into All Facets Of Life, From Self-driving Cars To Virtual Assistants. When The Technology Misfires, Where The Blame Lies Is Open To Interpretation. And It Could Get Worse When AI Starts Selling Products To Customers. Just Suing The Salesperson May Not Be Possible.

comments