

Confusing 0.05 and 5% cost hundreds of millions - jeeringmole
http://www.sec.gov/litigation/admin/2011/ia-3285.pdf

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jeeringmole
"Some Risk Model components sent information to the Optimizer in decimals
while other components reported information in percentages; therefore the
Optimizer had to convert the decimal information to percentages in order to
effectively consider all the information on an equal footing. Because proper
scaling did not occur, certain decimal information was not converted to
percentages and the Optimizer did not give the intended weight to common
factor risks."

And the impact: \-- AXA Rosenberg had to make clients whole for $217 million
in losses, plus pay a $25 million penalty. \-- Barr Rosenberg had to pay a
$2.5 million penalty and is barred from the securities industry for life. \--
AXA Rosenberg's assets under management fell from $70 billion to $29 billion
([http://www.nytimes.com/2011/09/23/business/ex-axa-
rosenberg-...](http://www.nytimes.com/2011/09/23/business/ex-axa-rosenberg-
executive-settles-sec-case.html))

