The U.S. Securities and Exchange Commission penalized two money managers for what it says were bogus claims about their use of artificial intelligence, marking the beginning of a fresh crackdown by Wall Street’s main regulator, Bloomberg News reported. The SEC said Monday that Delphia (USA) Inc. and Global Predictions Inc. both made “false and misleading statements” about their purported use of the technology. Global Predictions said that it had clarified how it uses AI in its marketing materials, and that it “cooperated fully with the inquiry and is pleased to put this behind us.” A lawyer for Delphia didn’t immediately respond to a request for comment. The SEC’s enforcement chief, Gurbir Grewal, said at a conference in Orlando, Florida, that the cases were only the start of the regulator’s action against misuse of AI. “We’re looking for misstatements, we’re looking for breaches of fiduciary duties by advisers,” Grewal said. In addition to allegations of so-called AI-washing, the regulator is looking for instances where the technology is used in market manipulation. The SEC is also on the lookout for conflicts of interest and has a team of people spread across the SEC’s enforcement and examination units looking into AI use.
