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Compliance and Regulatory Alerts  |  03-18-24

Investment Advisers Charged by the SEC for False and Misleading AI Use Claims

The SEC issued a press release Monday announcing settled charges against two investment advisers, Delphia (USA) Inc. and Global Predictions Inc., for making false and misleading statements about their purported use of artificial intelligence (AI). The firms agreed to settle the SEC’s charges and pay $400,000 in total civil penalties.

SEC Chair Gary Gensler commented, "Investment advisers should not mislead the public by saying they are using an AI model when they are not. Such AI washing hurts investors.” Chair Gensler later released his full comments on AI washing in a video on the SEC's YouTube channel:

Learn More About AI Risk for Financial Firms

AI Inventory and Risk Assessment: What a Financial Institution Risk Officer Needs to Know