AXA firms to pay $242 mn over program glitch

Feb 03, 2011
The US computer-based investment branch of the French AXA group will pay $242 million in compensation and fines after hiding a program glitch that cost investors millions, the SEC said Thursday.

The US computer-based investment branch of the French AXA group will pay $242 million in compensation and fines after hiding a program glitch that cost investors millions, the SEC said Thursday.

Three units under AXA Rosenberg, a program-based investing subsidiary of AXA Investment Managers, will pay $217 million for their losses and a penalty of $25 million for covering up the code problems of a quantitative investment model program, the said.

The SEC charged the three units with securities fraud for hiding the coding , which it said disabled a key component in the program for managing risk.

AXA Rosenberg agreed to pay the compensation and fine to settle the charges, while not admitting guilt in the case.

The SEC said senior managers of the three entities discovered the two-year-old problem in June 2009.

But "instead of disclosing and fixing the error immediately," a senior official of the entities "directed others to keep quiet about the error and declined to fix the error at that time," the SEC said in a statement.

Robert Khuzami, the director of the SEC’s enforcement division, said the secretive nature of computer-based investment programs leads to weakened oversight in companies.

"The secretive structure and lack of oversight of quantitative models, as this case demonstrates, cannot be used to conceal errors and betray investors," he said.

Explore further: Singapore's GIC buys into Taiwan music streaming firm

add to favorites email to friend print save as pdf

Related Stories

Monster settles SEC backdating charges for $2.5M

May 18, 2009

(AP) -- Monster Worldwide Inc., which runs the Monster job search Web site, has agreed to pay $2.5 million to settle federal civil charges that it secretly backdated options for its executives and employees.

Dell Inc. paying $100 million in SEC deal

Jul 23, 2010

(AP) -- Computer maker Dell Inc. is paying $100 million to settle civil charges that it fraudulently used payments from Intel to pump up its profits to meet Wall Street targets over five years, the government announced Thursday.

Complexity of financial services industry

Jan 04, 2008

The financial services industry is complex and financial service professionals are becoming less distinguishable and more inter-related, according to a new RAND Corporation report issued today.

Recommended for you

Telefonica ups bid to create Brazil's top operator

4 hours ago

Spain's telecommunications company Telefonica has raised its offer to buy Brazilian operator Global Village Telecom, or GVT, from French media conglomerate Vivendi to 7.45 billion euros ($9.82 billion) from 6.7 billion euros ...

Hackerspaces used to turn ideas turn into reality

Aug 27, 2014

At HeatSync Labs, the tables are littered with computer chips, pens, pads and tools while the room is abuzz with the chatter of would-be inventors hoping to change the world—or just make cool things. They are part of a ...

User comments : 0