Money manager AXA Rosenberg and co-founder Barr Rosenberg agreed to pay $65 million to settle a lawsuit by investors who said they lost money after a computer coding glitch impeded the firm's ability to manage risk.

Tuesday's settlement came nine months after AXA Rosenberg, a unit of French insurer AXA SA , agreed to pay $217 million to cover client losses and a $25 million fine to settle related U.S. Securities and Exchange Commission civil fraud charges.

Barr Rosenberg in September accepted a $2.5 million civil fine and lifetime ban from the securities industry to settle his own SEC case.

According to court papers, programmers introduced the coding error in January 2007, exposing clients to excess risk and causing losses that would not otherwise have occurred.

The error was found in June 2009 but not fixed for five months, and then not revealed to clients until April 15, 2010, after the SEC had begun examining the problem.

In a filing with the U.S. District Court in San Francisco, lawyers for four pension funds leading the investor lawsuit said the $65 million settlement marks a substantial recovery, above and beyond the sum obtained by the SEC.

The settlement requires court approval. A hearing has been scheduled for Feb. 17, 2012.

Neither AXA Rosenberg nor Barr Rosenberg admitted wrongdoing in settling with the SEC.

AXA Rosenberg managed $29 billion of assets in June 2011, down from about $70 billion at the end of 2009, in part reflecting client withdrawals stemming from the coding error.

The case is In re: AXA Rosenberg Investor Litigation, U.S. District Court, Northern District of California, No. 11-00536.

SEC Court California Settlement