Incident 653: Two Investment Firms Charged with Making False Claims of Artificial Intelligence Capabilities in Case of AI Washing

Responded

Description: In a case of AI washing, the SEC charged two investment advisers, Delphia and Global Predictions, for falsely stating their use of artificial intelligence in their investment strategies between 2019 and 2023. Their misleading claims resulted in a settlement whereby the firms agreed to pay a total of $400,000 in penalties, highlighting the critical consequences of misrepresenting AI capabilities on investment decisions and trust.

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Entities

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Alleged: Global Predictions Inc. and Delphia (USA) Inc. developed and deployed an AI system, which harmed Investors.

Incident Stats

Incident ID

653

Report Count

Incident Date

2019-01-01

Editors

Daniel Atherton

Incident Reports

Reports Timeline

SEC Charges Two Investment Advisers with Making False and Misleading Statements About Their Use of Artificial Intelligence

sec.gov

sec.gov · 2024

Securities and Exchange Commission post-incident response

Washington D.C., March 18, 2024 --- The Securities and Exchange Commission today announced settled charges against two investment advisers, Delphia (USA) Inc. and Global Predictions Inc., for making false and misleading statements about the…

Variants

A "variant" is an incident that shares the same causative factors, produces similar harms, and involves the same intelligent systems as a known AI incident. Rather than index variants as entirely separate incidents, we list variations of incidents under the first similar incident submitted to the database. Unlike other submission types to the incident database, variants are not required to have reporting in evidence external to the Incident Database. Learn more from the research paper.