Why the SEC’s Unwavering AI Policy Under New Leadership Could Shake Up Your Investment Playbook
“We’re looking at whether there’s transparency around the technology, whether it’s described accurately, whether there’s responsible communications to customers,” Zuberi said. “It’s easy to use a term like ‘AI,’ but is it automation of code or is it actually AI?”
In that sense, the SEC’s recent enforcement actions related to AI sound familiar. The commission filed a complaint last month charging the former chief executive of the shopping app Nate Inc. with perpetrating a $40 million fraud on investors tied to claims about its AI technology. A few weeks later, the founder of PGI Global was indicted for allegedly misleading investors about the company’s crypto-trading platform, which was purportedly developed using AI technology. (The SEC has been active on this front for a while—just look at the AI washing settlements it reached near the end of the previous administration.)
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