The U.S. Securities and Exchange Commission announced today that two investment advisers, Delphia and Global Predictions, have settled charges of making misleading statements regarding the use of artificial intelligence technology in their products.
AI washing is the relatively new marketing practice of falsely claiming that artificial intelligence is used in a company's services or products when its actual use is minimal.
Without admitting or denying the SEC's findings while investigating their cases, Delphia and Global Predictions consented to orders acknowledging violations of the Advisers Act and agreeing to cease any further infractions.
Delphia, an investment company based in Toronto, allegedly made inaccurate statements between 2019 and 2023 in its filings with the SEC, press releases, and website regarding using AI and machine learning in its investment strategies, which supposedly involved client data.
Delphia was also accused of violating the Marketing Rule, which prohibits registered investment advisers from disseminating false or misleading advertisements.
Global Predictions also allegedly misrepresented its offering of tax-loss harvesting services and included an impermissible liability hedge clause in its advisory contract, among other transgressions.
In response to its findings, the SEC's Office of Investor Education and Advocacy has also released an investor alert advising caution against potential investment fraud linked to AI and encouraging them to exercise diligence and conduct comprehensive research before engaging with AI-based financial services.
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This Cyber News was published on www.bleepingcomputer.com. Publication date: Mon, 18 Mar 2024 21:40:31 +0000