The Securities and Exchange Commission (SEC) has filed charges against two firms claiming these entities made “misleading statements” in regard to the utilization of artificial intelligence (AI).
Delphia (USA) Inc. and Global Predictions Inc. have both agreed to settle the SEC’s charges and pay $400,000 in total civil penalties. The penatly was paid withi0out admitting nor denying the charges. Delphia has agreed to pay $225,000, and Global Predictions has agreed to pay$175,000.
The SEC has highlighted AI as an area of focus for compliance.
The SEC’s order claims that Delphia made false statements in its SEC filings, in a press release, and on its website regarding its use of AI and machine learning that incorporated client data in its investment process.
As for Global Predictions, the SEC claims that the San Francisco-based firm made false and misleading claims in 2023 on its website and on social media about its use of AI.
SEC Chair Gary Gensler said they have seen this type of activity in the past in regard to new technology that can create “buzz.”
“Investment advisers should not mislead the public by saying they are using an AI model when they are not. Such AI washing hurts investors.”
