Investment firm chief resigns over data error cover-up
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AXA Rosenberg chairman, head of research and chief investment officer step down after suppressing news of “coding errors” in risk modelling systems
The chairman of an investment firm renowned for its data-driven approach to trading has stepped down after it emerged he tried to cover up a “coding error” in its risk modeling systems.
In April 2010, AXA Rosenberg revealed to clients that the performance of its investment portfolios may have been negatively impacted by a fault in its risk model. The fault had been discovered some time between June and November of the previous year.
At the time, it was alleged that the firm’s chairman and founder Barr Rosenberg had not revealed the fault “in a complete and timely manner". An internal report revealed this week that this was indeed the case.
Rosenberg has resigned from his post after the report found that he “had tried to suppress information and discussion of the errors at senior levels”, the Financial Times reports today. The firm’s head of research and chief investment officer are also to step down.
The vulnerability of global financial markets to computer glitches – or rather to human error in electronic trading systems – has been under close scrutiny since the ‘flash crash’ of May 6 2010. Some analysts have interpreted the stock market crash, which triggered the steepest ever single-day decline in the Dow Jones Industrial Average since the index’s began, as the result of a chain reaction in algorithmic trading systems.
