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The firm was accused by the SEC of failing to disclose potential conflicts of interest resulting from the fees it received from outside investors.
The SEC said the firms failed to supervise advisers engaging in the fraudulent practice of preferentially allocating profitable trades at the expense of client accounts.
SEC has fined Merrill Lynch and Harvest Volatility Management for fiduciary negligence resulting in higher fees, over-exposure and some losses.
With SEC and DOJ charges pending, we examine the case and assess the implications of the CCO’s characterization as a gatekeeper.
In one of this week’s cases, a company founder paid a data science professor to manufacture fake data, and an investment advisor firm failed to disclose fees of more than $4m.