Finance software bug causes $217m in investor losses

[The Straight Story]

Finance software bug causes $217m in investor losses



Dev pays $2.5m for hiding decimal-percentage flaw


A developer of financial software has agreed to pay $2.5 million to settle charges stemming from his concealment of a bug that caused $217 million in investment losses.

Barr M. Rosenberg, 68, of Sea Ranch, California, developed the quantitative investment modeling software in 2007 to help clients make investment decisions. The program captured and processed huge amounts of data contained in financial reports and other publicly available information to balance publicly traded company's earnings and valuation against common risk factors. After pioneering the field and serving as the original developer, he went on to oversee code improvements over the next few years.

In 2009, an employee of Rosenberg's company, Barr Rosenberg Research Center, discovered a two-year-old bug in the code that caused it to incorrectly calculate risks. The error stemmed from the failure to reconcile the use of decimals in some of the data and percentages in other information, causing risks to routinely be underrepresented. The employee disclosed his findings to Rosenberg and the firm's board of directors that same year.

http://www.theregister.co.uk/2011/09/22/software_bug_fine/

[Zywiec]

1. Here's a picture of the developer

[valerief]

3. My first thought, too!!!

:rofl:

[banned from Kos]

2. I worked in big-ticket software and our contract had a strict

Limitation of Liability clause. We could only be sued for the license fee (which was ofter millions) - not actual damages.

It was a BIG deal on contract negotiations.

[customerserviceguy]

4. Well, this is what happens

when you let machines do the thinking you're supposed to do.