The U.S. Securities and Exchange Commission announced on Monday that two investment advisors had reached a settlement agreement to pay penalties, acknowledging that the regulator had accused them of making false and misleading claims about their use of artificial intelligence (AI).
To resolve the civil accusations connected to “AI washing,” Toronto-based Delphia Inc. and San Francisco-based Global Predictions Inc. agreed to pay $400,000 in fines, the SEC said in a statement. The companies did not acknowledge or reject the SEC’s allegations.
Laptops 1000Authorities have been increasing their monitoring of AI. The SEC has issued several warnings to businesses for misrepresenting the capabilities of artificial intelligence.
Companies have been cautioned by Chair Gary Gensler to make sure they are providing correct information, particularly if they are utilizing artificial intelligence.
In a statement, Global Predictions stated that it had assisted with the investigation. The statement added, “We have also made it clear in all of our marketing exactly how we use AI.”
Delphia was found by the SEC to have made false and misleading statements about its alleged usage of artificial intelligence (AI) and machine learning between 2019 and 2023 in SEC filings, a press release, and on its website.
According to the SEC, Global Predictions made erroneous and deceptive statements on artificial intelligence in 2023 on its website and social media.
SEC Division of Enforcement Director Gurbir Grewal stated in a statement,
“We’ve seen time and time again that when new technologies come along, they can create buzz from investors as well as false claims by those purporting to use those new technologies.”
The SEC announced that Global Predictions would pay $175,000 and Delphia $225,000 in penalties, respectively.
