Artificial intelligence (AI) is everywhere, and the U.S. Securities and Exchange Commission (SEC) is making sure companies do not exaggerate their AI capabilities.
The SEC warned in December 2023 that it would not tolerate “AI washing,” a marketing tactic where companies overstate their AI capabilities or technology to trick investors. In January 2024, the SEC, North American Securities Administrators Association (NASAA) and Financial Industry Regulatory Authority (FINRA) jointly issued an “Investor Alert” about increases in investment fraud involving AI and other emerging technologies.
