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AI fibbers fined

by on19 March 2024

Pay no attention to the man behind the curtain

Two investment advisors were caught lying about their fancy AI tech. The US bigwigs have fined them heftily for puffing up their AI credentials.

Canada-based Delphia and San Francisco-headquartered Global Predictions will cough up $225,000 and $175,000, respectively, for telling clients that their products used AI to improve forecasts.

They've been doing a bit of "AI washing"—that's tech talk for making their gear sound more 'robot brainy' than it is.

Delphia has been blathering about how its AI is gobbling up client data to dish out top-notch investment advice. But it's all a load of codswallop. Even after a warning nudge from the SEC back in 2021, they kept on with their tall tales.

Global Predictions, the self-proclaimed “first regulated AI financial advisor,” has been left red-faced after failing to back up its grandiose claims. When the SEC asked for proof, the firm was left scrambling and “could not produce documents” to support its assertions.

The firm was in trouble for not disclosing conflicts of interest with those praising it. According to the SEC, false claims of offering tax-loss harvesting services and using forbidden language in its advisory contract were just the tip of the iceberg in a series of “securities law violations.”

In a twist, Global Predictions has rebranded its AI as “your personal AI financial adviser,” a move it claims is “to reflect our unique value proposition more accurately.” The firm remained tight-lipped about the SEC case against it but said it has “cooperated fully with the inquiry and is pleased to put this behind us.”

The SEC has warned investors starkly, urging caution against scammers looking to capitalise on the latest AI hype cycle.

The SEC's head honcho, Gary Gensler, had none of it. He's called out these two for selling porkies about their AI magic, saying they've been all mouth and no trousers.

"Delphia and Global Predictions marketed to their clients and prospective clients that they were using AI in certain ways when, in fact, they were not." 

So there you have it – a couple of tech upstarts caught with their pants on fire, and now they're paying the price for their tech fibs.

Last modified on 19 March 2024
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