The TL;DR of Knight is that Knight had several things go wrong at the same time, and had no circuit breaker for the problem that did not stop trading for the whole firm for the day. Most trading firms have had things go badly, but the holes in the Swiss cheese aligned for Knight (and they were larger than many other firms). This all comes from a sort of culture of carelessness.
I always thought the Swiss cheese model was used to suggest that no one party could possibly be responsible for a bad thing that happened. Interesting to see the company’s culture blamed for the cheese itself.
Personally, I think there are too many things in modern American society that involve diffusion of responsibility, presumably so that people avoid negative consequences. If you're going to suggest that a system gives 1/10th of the responsibility to 10 different people, the one who made the system is the enabler of that and IMO should suffer the consequences.
The Swiss cheese model fits better as a rebuttal when the cheese comprises both the finger-pointer and the finger-pointee. Think: sure, our software had a bug that said up was down, but what about all of your own employees who used the software, had certifications, and should have known better than to accept its conclusions?
Your usage, in assigning blame rather than diffusing it, was novel to me.
The TL;DR of Knight is that Knight had several things go wrong at the same time, and had no circuit breaker for the problem that did not stop trading for the whole firm for the day. Most trading firms have had things go badly, but the holes in the Swiss cheese aligned for Knight (and they were larger than many other firms). This all comes from a sort of culture of carelessness.