Massachusetts Regulators Launch Probe into AI in Securities Industry
Massachusetts securities regulators have opened an investigation into the ways in which investment firms use artificial intelligence (AI) in their interactions with investors. Bill Galvin, the state's top securities regulator, on Thursday announced that his office had sent letters of inquiry to a number of firms using or developing AI for their businesses, including JPMorgan Chase and Morgan Stanley. "If deployed without the guardrails necessary to ensure proper disclosure and consideration of conflicts, I am concerned that this technology could result in harm to investors," Galvin said. The opening of the investigation came a week after the U.S. Securities and Exchange Commission proposed requiring broker-dealers to eliminate possible conflicts of interest from the use of AI on trading platforms.
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