Tr?id=566623520170033&ev=PageView&noscript=1

SEC Cracks Down on Misuse of Artificial Intelligence

Posted on May 6th, 2024 at 2:53 PM

From the desk of Jim Eccleston at Eccleston Law

The U.S. Securities and Exchange Commission (SEC) has taken action against two money managers, Delphia (USA) Inc. and Global Predictions Inc., for allegedly making false and misleading statements regarding their utilization of artificial intelligence (AI) technology.

According to the SEC, Delphia and Global Predictions misrepresented their use of AI in investment processes, with Delphia falsely claiming to incorporate machine learning from 2019 to 2023 and Global Predictions making misleading statements about being the "first regulated AI" financial advisor, among others.

According to ThinkAdvisor, the regulator is not only targeting instances of "AI-washing" but also investigating potential AI-driven market manipulation and conflicts of interest.

Delphia and Global Predictions settled their cases with the SEC without admitting or denying the allegations. Delphia agreed to pay $225,000, while Global Predictions agreed to a $175,000 settlement.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, sec

Return to Archive

TESTIMONIALS

Previous
Next
Quotes Bigger

Fantastic news!!!!  Your professionalism, support and expertise were greatly appreciated.  You made a difficult situation much more bearable.

Marci M.

LATEST NEWS AND ARTICLES

1791220249 Law
October 5, 2026
House Passes Bill to Restore Tax Deduction for Financial Fraud Victims

Victims of financial fraud may soon receive additional tax relief under legislation that overwhelmingly passed in the House of Representatives.

1790960250 Law
October 2, 2026
FINRA Arbitrators Award Schwab Client $1.34 Million in Cryptocurrency Scam Dispute

A Financial Industry Regulatory Authority (FINRA) Dispute Resolution Services arbitration panel awarded nearly $1.34 million in compensatory damages to a Charles Schwab & Co.

1790867615 Law
October 1, 2026
Prosecutors Target Multimillion-Dollar Investment Schemes Involving Promissory Notes

Federal prosecutors recently pursued two investment fraud cases involving promissory notes that caused combined investor losses exceeding $25 million.