Tag: AI

Robotic Automation Company Hit With AI-Related Securities Suit | The D&O Diary

As AI becomes an ever-more present component of many companies’ strategies and operations, one concern is the extent to which this technological shift could affect companies’ litigation risk exposures. One risk companies may face is that in seeking to promote their adoption of AI strategies, companies may be susceptible to allegations that they overstated their AI capabilities or the extent…

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Musk Chose Who Got Chips – Bloomberg

If you are the chief executive officer and controlling shareholder of two different companies, each with different minority shareholders and employees, and they both use the same essential scarce inputs, and the sole supplier of those inputs calls you up and says “we are backed up and can only meet the needs of one of your companies, which one should…

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Podcast: SEC Commissioner Hester Peirce on regulatory demands, CCO input | Podcast | Compliance Week

HP:  …. Same with AI (artificial intelligence), where we run the risk of a similar problem. AI has been used in the financial industry for a long time, but there may be other uses, particularly uses that are customer facing. That’s going be the kind of thing where when clients are involved, when retail investors are involved, the SEC’s going…

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AI, Risk, and Public Company Disclosures | The D&O Diary

Since OpenAI launched ChatGPT in November 2022, the race to capitalize on emerging artificial intelligence (AI) technologies has super-charged the financial markets. The stock prices of AI-associated companies, such as Nvidia and Super Micro Computer, have soared. Several AI-related companies  — such as, for example, Astera Labs and Rubrik — have recently successfully completed IPOs, so much so that that…

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Preparing for AI Whistleblowers – Debevoise Data Blog

AI enforcement and whistleblower protection are priority areas for both the SEC and the DOJ. The longstanding whistleblower program at the SEC has yielded dozens of significant enforcement actions. The SEC has repeatedly warned market participants against “AI washing” and has charged its first-ever AI fraud cases. The U.S. Department of Justice (“DOJ”) similarly launched its AI enforcement program in…

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SEC Charges Founder of Artificial Intelligence Start-Up with Defrauding Investors

The Securities and Exchange Commission filed charges today against Michael Brackett (“Brackett”), the founder and CEO of purported artificial intelligence start-up Centricity, Inc., for allegedly engaging in a multimillion-dollar offering fraud. According to the SEC’s complaint, from 2019 through 2021, Brackett raised $2.8 million from seven investors by making fraudulent misrepresentations about Centricity’s customers and revenue as well as Brackett’s…

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Remarks at Program on Corporate Compliance and Enforcement Spring Conference 2024 – Gurbir Grewal

Put another way: any time you have individuals or corporations trying to capitalize and profit on FOMO, or the “fear of missing out,” around a new technology or offering, it should raise red flags for regulators and compliance professionals alike. After all, effective enforcement and governance require anticipating risk areas. So looking ahead, where do we see potential risk? Every…

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Security Screening Company Hit with AI-Related Securities Suit | The D&O Diary

Last week, when I wrote about two recent AI-related SEC enforcement actions, I noted that the SEC’s public statements when it announced the enforcement action settlements not only underscored the SEC’s AI-related concerns but also illustrated the kinds of issues that could lead to private securities litigation brought by investors who claim they were misled by companies’ AI-related disclosures. In…

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