The SEC said the error in the computer code for a quantitative investment model, which Rosenberg had developed, caused Axa clients $217 million in losses after it was disclosed in April 2010.
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According to , he learned of the error in June 2009, but directed others to keep quiet about it and not fix it immediately. He also denied the existence of any significant errors in the model during an October 2009 board meeting discussion about its performance. AXA Rosenberg disclosed the error to SEC examination staff in late March 2010 after being informed of an impending SEC examination. The error was not disclosed to clients until April 2010, causing them $217 million in losses.
The SEC had , which agreed to pay $217 million to clients, along with a $25 million penalty.
"Rosenberg chose concealment over candor, and in doing so selfishly served his interests over those of his clients," said Robert Khuzami, director of the SEC Division of Enforcement, said.