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Exceeding client-designated investment limits leads to IA fines

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SEC has fined Merrill Lynch and Harvest Volatility Management for fiduciary negligence resulting in higher fees, over-exposure and some losses.

Investment adviser Merrill Lynch (Merrill) and derivatives specialist Harvest Volatility Management LLC (Harvest) agreed to pay $9.3m for failing to follow “basic client instructions,” according to the SEC.  

The charges arise from Harvest’s management of its Collateral Yield Enhancement Strategy (CYES), a variation of the Iron Condor investing strategy. 

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