(MENAFN) On Monday, the US Securities and Exchange Commission (SEC) revealed that it had reached a settlement regarding allegations against two investment advisor firms for providing inaccurate and deceptive information regarding their utilization of artificial intelligence (AI).
Delphia (USA) Inc. and Global Predictions Inc. have agreed to settle the charges brought forth by the SEC and will collectively pay USD400,000 in civil penalties, as stated by the regulatory body.
"We find that Delphia and Global Predictions marketed to their clients and prospective clients that they were using AI in certain ways when, in fact, they were not," stated SEC Chairman Gary Gensler.
"We’ve seen time and again that when new technologies come along, they can create a buzz from investors as well as false claims by those purporting to use those new technologies. Investment advisers should not mislead the public by saying they are using an AI model when they are not. Such AI washing hurts investors," he further mentioned.
The SEC disclosed that Delphia, headquartered in Toronto, had disseminated false and misleading information through its SEC filings, press releases, and website spanning from 2019 to 2023. These statements misrepresented the extent of the company's employment of artificial intelligence (AI) and machine learning, which purportedly incorporated client data into its investment procedures.
Similarly, San Francisco-based Global Predictions was found to have made deceptive assertions in 2023, both on its website and across social media platforms. These claims falsely declared the company as the "first regulated AI financial advisor" and misrepresented its platform as offering "expert AI-driven forecasts," according to the SEC.
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