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

You are the best attorneys in the country.

CC

LATEST NEWS AND ARTICLES

1786029344 Law
August 6, 2026
Account Takeover Fraud Continues to Rise as Cybercriminals Refine Their Tactics

Cybercriminals continue to refine account takeover schemes, driving billions of dollars in losses for businesses and consumers each year.

1785949175 Law
August 5, 2026
FINRA Arbitration Panel Orders Arkadios Capital to Pay $2.7 Million in Ponzi Scheme-Related Claim

A Financial Industry Regulatory Authority (FINRA) arbitration panel has ordered Arkadios Capital to pay $2.7 million in damages to an investor who alleged the firm failed to supervise a former registered representative whose father operated a long-running Ponzi scheme, according to InvestmentNews.

1785858278 Law
August 4, 2026
SEC Fines Former LPL Broker $125,000 for Undisclosed Conflicts in Private Securities Offerings

The Securities and Exchange Commission (SEC) has censured a former LPL Financial broker and imposed a $125,000 civil penalty after finding that he failed to disclose conflicts of interest related to private real estate securities offerings that generated nearly $1.5 million in compensation, as reported by AdvisorHub.