Advisers

FYI: Computer Model Errors – Continued Risk to Advisers

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FYI: The SEC has brought and settled another case based on charges that should all advisers should heed as investing increasingly relies on computer algorithms, quantitative models and other automated procedures that affect client portfolios. This most recent case was brought against various AEGON/Transamerica-affiliated advisory entities for fraud and various other violations resulting from errors in quantitative investment models that, according to the SEC’s settlement order, were developed solely by an inexperienced, junior analyst, contained numerous errors, and did not work as promised. The SEC also found that when the firms learned about the errors, they stopped using the models […]