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

Thank you for your professional assistance with this matter. You are very good at what you do.

John T.

LATEST NEWS AND ARTICLES

September 11, 2025
Montana Federal Judge Allows Family's Premium Financing Claims to Proceed

A federal judge in Montana has allowed a family to move forward with negligence, fraud, and unjust enrichment claims tied to a premium-financed life insurance arrangement valued at $67.5 million.

September 10, 2025
Arizona Man Sentenced to 30 Years for Multi-Million Dollar Ponzi-Style Fraud

An Arizona man has been sentenced to 30 years in prison for running a Ponzi-style investment scheme that defrauded more than 100 victims out of millions of dollars, according to the U.S. Attorney’s Office for the District of New Mexico.

September 9, 2025
Easterly ROCMuni Fund's Steep Decline Spurs Potential Investor Lawsuits

The Easterly ROCMuni High Income Municipal Bond Fund (RMHIX) has suffered a dramatic collapse, losing nearly half its value in June and now trading at a net asset value (NAV) of $2.95 per share.