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ARTICLE · 19 MARCH 2024

SEC Cracks Down On Over-Hyped AI Claims – Director Says This Is Just The Beginning

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The SEC has charged and settled claims with two Investment advisers with making false and misleading statements about their use of artificial intelligence (AI).

United StatesTechnology
James Gatto
James Gatto
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The SEC has charged and settled claims with two Investment advisers with making false and misleading statements about their use of artificial intelligence (AI). The SEC found that Delphia (USA) Inc. and Global Predictions Inc. marketed to their clients and prospective clients that they were using AI in certain ways when, in fact, they were not. SEC chair Gensler noted that when new technologies come along, they create buzz from investors and false claims by those purporting to use those new technologies. He admonished investment advisers to not mislead the public by saying they are using an AI model when they are not and that such "AI washing" hurts investors. The companies paid $400,000 in civil penalties.

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