Insights

Over the past few years, the use of Artificial Intelligence (“AI”) has exploded across multiple industries and many financial services institutions have come to rely on AI—or claim to rely on AI—to generate, assist, and complete business objectives.  So, too, has the regulatory scrutiny around “AI washing,” or firms’ overstating or misrepresenting their use of AI to attract investors.  Similar to "greenwashing," where regulators have scrutinized public claims by companies that they are more environmentally friendly than they actually are, the concept of AI washing has come into sharp focus for the Securities and Exchange Commission (“SEC”), evidenced by multiple public warnings and two recent enforcement actions.