©Reuters. FILE PHOTO: The logo of the U.S. Securities and Exchange Commission adorns the door of an office at SEC headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst/File Photo
WASHINGTON (Reuters) – U.S. financial regulators have settled charges against two investment advisers for false and misleading statements about their use of artificial intelligence, or “AI washing”, the Securities and Exchange Commission said on Monday.
Toronto-based Delphia Inc and San Francisco-based Global Predictions Inc will pay a $400,000 fine to resolve civil charges, but have neither admitted nor denied the agency’s findings, the SEC said.
“Today’s enforcement actions make it clear to the investment industry: If you claim to use artificial intelligence in your investment processes, you must ensure that your statements are not false or misleading,” the director of the enforcement division said in a statement of SEC Gurbir Grewal.
“Public issuers making claims about the adoption of AI must also remain vigilant about similar misrepresentations that may be material to individuals’ investment decisions,” Grewal added.
Representatives for the two companies could not immediately be reached for comment. Delphia will pay a $225,000 fine, while Global Predictions will pay $175,000, the SEC said.
SEC Chairman Gary Gensler has repeatedly warned companies in recent months against “AI washing” or making false statements about the use of AI.