[ad_1]
The Securities and Exchange Commission filed charges against Harvest Volatility Management and Merrill Lynch for surpassing clients’ predetermined investment limits over a two-year period. Both companies have agreed to pay a total of $9.3 million in penalties to settle the claims.
Harvest managed the Collateral Yield Enhancement Strategy, which traded options in a volatility index for potential additional returns. Beginning in 2016, Harvest allowed numerous accounts to exceed the specified exposure levels, with many surpassing the limit by 50% or more, as stated in the SEC’s orders.
Merrill Lynch facilitated its clients’ connection to Harvest despite knowing that their accounts were exceeding the set exposure levels. Merrill also received a portion of Harvest’s trading commissions and management fees. Both companies were found to have neglected implementing policies and procedures to notify investors of exposure surpassing the designated limits.
According to the SEC, both Merrill and Harvest received higher management fees while investors were subjected to increased financial risks. The SEC’s associate director of enforcement, Mark Cave, highlighted the failure of both companies to adhere to basic client instructions and policies. Representatives from Bank of America did not immediately respond to requests for comment on the charges or settlement.
[ad_2]
SOURCE
Emily Jensen, graduated from the London School of Economics and Political Science (LSE) in the UK in 2015 with a degree in Economics. She specializes in financial markets and international trade. After graduating, she worked as an analyst at an investment bank in London, where she developed expertise in global economic trends. She later transitioned into consulting, focusing on fintech ventures and providing insights into global economic developments. Emily is passionate about the intersection of finance and technology and aims to drive innovation in the financial sector.
