The Securities and Exchange Commission (SEC) has resolved allegations against two advisory firms accused of falsely claiming to employ artificial intelligence (AI) technology, misleading the public in the process.
Delphia and Global Predictions consented to the settlement terms with the SEC, which includes a collective payment of $400,000 in fines.
The accusation centered on both entities engaging in “AI washing,” which involves falsely advertising the use of AI as a lure for investment and interest.
SEC Chair Gary Gensler emphasized the recurrent issue of companies leveraging the allure of new technologies, like AI, to attract investment under false pretenses. He stressed that such deceptive practices, referred to as AI washing, are detrimental to investors.
Gensler pointed out the growing trend among investors to seek out companies utilizing AI technologies as part of their decision-making criteria, leading some firms to falsely market themselves as AI-driven to garner investments.
The SEC highlighted that Delphia, based in Toronto, made unsubstantiated claims about employing collective data to enhance their artificial intelligence’s ability to predict emerging companies and trends, assertions found to be inaccurate due to the lack of actual AI and machine learning capabilities.
Similarly, San Francisco’s Global Predictions falsely advertised itself as the “first regulated AI financial advisor” on its website, a claim without merit.
As part of the settlement, Delphia and Global Predictions will pay fines amounting to $225,000 and $175,000, respectively.
