by Tami Stark, Courtney Hague Andrews, Maria Beguiristain, Joel M. Cohen, Daniel Levin, Darryl Lew, and Marietou Diouf
Top (left to right): Tami Stark, Courtney Hague Andrews, Maria Beguiristain, and Joel M. Cohen
Bottom (left to right): Daniel Levin, Darryl Lew, and Marietou Diouf (Photos courtesy of White & Case LLP)
In December 2023, we published an alert concerning US Securities and Exchange Commission (“SEC”) Chair Gary Gensler’s warning to public companies against “AI washing” – that is, making unfounded claims regarding artificial intelligence (“AI”) capabilities.[1] It is no surprise that since then regulators and the US Department of Justice (“DOJ”) have repeated this threat and the SEC publicized an AI related enforcement action that typically would not get such emphasis.
In January 2024, the SEC’s Office of Investor Education and Advocacy issued a joint alert with the North American Securities Administrators Association and the Financial Industry Regulatory Authority warning investors of an increase in investment frauds involving the purported use of AI and other emerging technologies.[2] Similarly, the Commodity Futures Trading Commission Office of Customer Education and Outreach issued a customer advisory warning the public against investing in schemes touting “AI-created algorithms” that promise guaranteed or unreasonably high returns.[3]