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The Securities and Exchange Commission has fined Merrill Lynch $12.5 million for ineffective trading controls which led to a series of "mini-flash crashes".

The Bank of America-owned unit caused at least 15 market disruptions between late 2012 and mid-2014, an SEC investigation found.

The bank violated the Market Access Rule because internal controls designed to prevent erroneous orders were set at levels far too high, rendering them ineffective.

For example, Merrill Lynch applied a limit of five million shares per order for one stock that only traded around 79,000 shares per day.

This meant that the broker sent some stock prices crashing, only for them to recover within seconds.

"Mini-flash crashes, such as those caused by Merrill Lynch, can undermine investor confidence in the markets," says Andrew Ceresney, director, enforcement division, SEC.

Separately, six exchanges have collectively fined Merrill Lynch $3 million for violating their respective supervision rules.

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