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

 


It was really fun seeing you fight for us. You have an amazing way of thinking out of the box.


 

Beth M.

LATEST NEWS AND ARTICLES

1775253477 Law
April 3, 2026
FINRA Enforcement Trends Show Higher Monetary Sanctions Despite Fewer Cases in 2025

The Financial Industry Regulatory Authority (FINRA) increased total monetary sanctions in 2025, even as the number of enforcement actions declined.

1775060885 Law
April 1, 2026
Florida FINRA Arbitration Panel Orders Charles Schwab to Pay $3.8 Million to Investors

A Financial Industry Regulatory Authority (FINRA) arbitration panel has ordered Charles Schwab & Co.

1774973592 Law
March 31, 2026
Cybersecurity Breach at Edelman Financial Engines Highlights Growing Risks for Advisory Firms

A recent cybersecurity incident involving Edelman Financial Engines has drawn attention to the increasing number of cyberattacks targeting registered investment advisers, according to Financial Advisor News.