09.09.24

Gensler Again Warns Advisors and BDs About AI Washing

by: Emile Hallez

In an “Office Hours” video posted on YouTube last week, U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler reiterated a warning to investment advisors and broker-dealers about “AI washing.” Gensler said that companies "should ask themselves some basic questions, such as if we're discussing artificial intelligence in our earnings calls or having extensive discussions with our board of directors, maybe this information is potentially material to our business and to investors.” He added, “Investment advisors, broker-dealers also should not mislead the public by saying they're using AI when they're not, nor say that they're using it in a particular way and not do so.” The video posting follows at least three cases the SEC has filed this year against companies over alleged AI washing.

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