SEC Files “AI-Washing” Enforcement Action Against AI-Based Start-Up Founder | The D&O Diary

There are several points about these circumstances that bear emphasizing. The first is that the enforcement action was accompanied by a parallel criminal complaint…

Another thing that readers will want to note is that Joonko was a private company, yet its CEO is the subject of a SEC enforcement action alleging violations of the federal securities laws. It is not news that the federal securities laws apply to private companies, but from time to time it is worth re-iterating that the U.S. securities laws do not just apply to publicly traded companies.

One other note about this latest action is that while the SEC has now brought several AI-related enforcement actions, the SEC has still not yet brought an AI-related action against a listed company. Although at this point we can only speculate, I suspect that it is only a matter of time before the agency targets a listed company in an AI-related action.

Source: SEC Files “AI-Washing” Enforcement Action Against AI-Based Start-Up Founder | The D&O Diary