United States · AI · 18 Mar 2024

SEC fines two investment firms for overstating their use of AI

$400,000 in total civil penalties ($225,000 Delphia; $175,000 Global Predictions)

Company: Delphia (USA) Inc. and Global Predictions Inc.
Regulator or court: US Securities and Exchange Commission
Law: Investment Advisers Act of 1940, including the Marketing Rule
Status: Settlement

What happened

The SEC found that Delphia claimed in filings, a press release and on its website that it used AI and machine learning on client data to make investment decisions, when it did not have those capabilities. Global Predictions called itself the 'first regulated AI financial advisor' and made other false claims. Both firms settled without admitting or denying the findings, in what the SEC presented as its first 'AI washing' cases.

Sources

SEC press release 2024-36

Summary in our own words. General information, not legal advice.

Ready when you are

Could this happen to you? Let’s find out.

Tell me what you’re building. I’ll tell you what you need. No obligation.

Book an intro call

What happened

Marketing firms pay $930,000 over fake AI 'listening' ad service

Uber fined almost €825m for letting an algorithm switch off drivers' accounts

GM pays record $12.75m for selling drivers' location and driving data

Could this happen to you? Let’s find out.