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A logo for financial service company Merrill Lynch is seen in New York.

The Securities and Exchange Commission charged Harvest Volatility Management and Merrill Lynch on Wednesday for exceeding clients' predesignated investment limits over a two-year period.

Merrill, owned by Bank of America , and Harvest have agreed in separate settlements to pay a combined $9.3 million in penalties to resolve the claims.

Harvest was the primary investment adviser and portfolio manager for the Collateral Yield Enhancement Strategy, which traded options in a volatility index aimed at incremental returns. Beginning in 2016, Harvest allowed a plethora of accounts to exceed the exposure levels that investors had already designated when they signed up for the enhancement strategy, with dozens passing the limit by 50% or more, according to the SEC's orders.

The SEC said Merrill connected its clients to Harvest while it knew that investors' accounts were exceeding the set exposure levels under Harvest's management. Merrill also received a cut of Harvest's trading commissions and management and incentive fees, according to the agency.

Both Merrill and Harvest received larger management fees while investors were exposed to greater financial risks, the SEC said. Both companies were found to neglect policies and procedures that could have been adopted to alert investors of exposure exceeding the designated limits.

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