In a move that signals more stringent oversight of corporations’ artificial intelligence activities, the U.S. Securities and Exchange Commission (SEC) has recently issued formal charges against companies for their misleading practices known as “AI washing”.
This comes after previous warnings by the SEC, last December, cautioning firms against making unsubstantiated claims of their technological prowess. The recent regulatory push focuses on two investment advisers, Delphia (USA) Inc. and Global Predictions Inc., charged for their inaccurate declarations about their AI usage.
These cases, initiated on March 18, signify the commission’s first active stance against AI washing, thus hinting at an intensified scrutiny from both the SEC and other state and federal agencies monitoring business applications of AI technology.
For legal professionals handling corporate affairs, this underscores the growing importance of accurately representing a company’s AI deployment in adherence with regulatory requirements. The ongoing enforcement actions serve as a critical reminder for companies to review their technology claims to avoid potential legal ramifications.
For further details on the SEC’s cautionary steps and the specifics of the recent charges, you can visit the original Legaltech News article.