The Securities and Exchange Commission (SEC) announced Monday that two investment firms have agreed to pay a total of $400,000 in penalties after the companies made false and misleading statements about their use of artificial intelligence (AI). did.
The investment companies, Toronto-based Delphia and San Francisco-based Global Predictions, neither admit nor deny the civil charges, the SEC said in a statement. The SEC has vowed to crack down on “AI washing.”
“We have seen time and time again that when new technology emerges, it can generate buzz from investors and false claims by those purporting to use the new technology. Investment advisors should not mislead the public by saying they are using AI models when they are not. Such AI laundering harms investors.” said Gary Gensler in a statement.
The SEC said that from 2019 to 2023, Delphia claimed in SEC filings, press releases and on its website that it had AI and machine learning capabilities that it did not have. Delphia agreed to pay $225,000 to settle the civil suit.
The SEC announced that Global Predictions falsely reported its use of AI on its website and social media platforms in 2023 and agreed to pay a $175,000 civil penalty in a settlement.
“Global Predictions fully cooperated with the investigation and is happy to discontinue this investigation. Additionally, we have made clear how exactly we will use AI across our marketing,” Global Predictions said in a statement. It is stated in
The Hill also reached out to Delphia for comment.
“As today’s enforcement action makes clear to the investment industry, when you claim to use AI in your investment process, you must ensure that your representations are not false or misleading,” SEC Enforcement said. Gubir Grewal, director of the department, said in a statement.
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