It was Waddell & Reed, not Fat Finger Freddie
Waddell & Reed is a non-aggressive middle America mutual fund manager. They were hedging, i.e. protecting, the investments they manage by placing an order to sell some derivatives called e-mini contracts. If the market goes down the e-minis go up and vice-verse. It is an easy way to insulate a portfolio from the market temporarily.
The wild impact was due to the confluence of a larger than normal order to sell contracts and an unusually nervous market. Foul play would have been better. You find the culprit, mete out a punishment and increase surveillance for the future. But here there was no culprit. There is nothing to say it will not happen again.
The order in question was for 75,000 contracts into a market that trades 50,000 an hour on average. It is easy to imagine how two or three nervous managers might come in with, say 25,000 each in a short period of time to protect their portfolios as the market starts to tank. I hate to say it, but a rule is needed, not sweeping new regulation but a rule or two so the tail cannot wag the dog.