SEC Continues Focus On AI And Cyber-Risk Related Enforcement Cases

The SEC kicked off its fiscal year by bringing enforcement actions focused on AI and cyber disclosures. As discussed in more detail below:

• These actions again show SEC Enforcement prioritizing "hot button" issues like AI and cyber, highlighting, for example, a company's statements about its use of AI in what otherwise appeared to be a fairly garden-variety securities fraud case.
• The actions largely involve well-worn principles of securities law applied in the context of emerging technologies, including (i) while there may be no obligation to speak on a particular issue (such as AI), if a company does speak, its statements must be full, complete, and not misleading and (ii) companies' obligation to consider whether existing disclosures need to be updated in light of recent events (such as a cyberattack).