The US Securities and Exchange Commission (SEC) is keeping an eye on AI-related misconduct, especially the practice known as “AI washing”. At a recent Securities Enforcement Forum, SEC officials stressed the importance of preventing companies from making false claims about their AI capabilities. This comes amidst a broader agenda by Chair Paul Atkins to enhance enforcement priorities in the AI sector.
Key Points
- The SEC’s Cybersecurity and Emerging Technologies Unit (CETU) is prioritising the investigation of misleading AI capabilities.
- Recent settlements highlight the risks of making exaggerated or false claims about AI in investment processes.
- The SEC continues to maintain its focus on traditional enforcement priorities, including insider trading and fiduciary duty violations.
- Companies are encouraged to develop robust AI governance frameworks to mitigate enforcement risks.
- Ongoing testing and accurate documentation of AI capabilities are essential for compliance.
Why should I read this?
If you’re in the business of AI or involved in investment markets, this article is a must-read. The SEC is doubling down on its scrutiny of AI claims, and being uninformed could cost you. The recommendations outlined could save you from potential legal troubles down the line, so it’s worth a few minutes of your time to stay ahead of the game.