They weren't taking long-term speculative positions, their short-term market making had a major bug in which instead of buying low and selling high it was doing the opposite (thus losing a small amount on each pair of trades). For more details read Nanex's blog (http://www.nanex.net/aqck2/3522.html).
So, they launched a busted market making algorithm, lost a ton of money and no one is going to bail them out.
So, they launched a busted market making algorithm, lost a ton of money and no one is going to bail them out.