This error is often produced by the server which identifies itself as Maveric_SSHD.

Case 1. Command rejected due to SFTP proxy policy settings: SSH_FXP_INIT.

This happens when the server does not recognize the requested SFTP protocol version. The solution is to enable just SFTP 3 using the Versions property of the SFTP component.

Case 2. Command rejected due to SFTP proxy policy settings: SSH_FXP_OPEN

This happens because the server is misconfigured and defaults to the directory outside of the user account's home folder. The solution is to use the RequestAbsolutePath("/") method before performing file operations.