Re: the known unknowns
Yes, hindsight is always easy. It's easy for us to sit here and say, "why didn't Knight take steps to protect itself from trading code errors? why wasn't there a kill switch?"
The Flash Crash was a true unknown, but it shouldn't be anymore. There should be safeguards for drunk traders, fat fingers and rogue algos because those are all broad risks that can be watched. And, yes, people will always find ways to cheat the system. You can't dream up of every scenario in advance, but firms can put in broad risk controls that colelctively protect against many risks.