SEC Chair Gary Gensler Warns AI Risks Financial Stability – Bloomberg

Gensler, who previously taught classes at the Massachusetts Institute of Technology, has frequently discussed the impact of AI on finance since taking the helm of the SEC in 2021. However, he said Monday that the issues have taken on a new importance with recent advances in the tools, which he called “the most transformative technology of our time.”

On a more micro level, companies need to be aware of how their use of AI may implicate securities rules, he said. Whether it is used for financial fraud, juicing corporate returns or steering investors toward specific products, the SEC will be on the lookout, Gensler said.

In particular, publicly traded companies should be wary of misleading investors through their corporate statements and disclosures about the risks and opportunities AI might bring, he said. He added that the SEC’s investigators could benefit from using more AI in their surveillance, analysis and enforcement.

Source: SEC Chair Gary Gensler Warns AI Risks Financial Stability – Bloomberg