- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Jeff Dale2024-10-11T13:44:00
The Securities and Exchange Commission (SEC) ordered the owner of Rimar Capital and a board member of its holding company to pay nearly $524,000 in penalties for defrauding investors with false and misleading statements about its use of artificial intelligence (AI).
Itai Liptz, CEO of Rimar Capital and Rimar Capital USA, agreed to pay more than $202,000 in disgorgement, more than $11,000 in prejudgment interest, a $250,000 fine, and be subject to a five-year officer and director bar, the SEC announced in a press release Thursday. Clifford Boro, a Rimar USA board member, agreed to pay a $60,000 fine, and Rimar agreed to cease and desist from further violations and be censured, the agency noted.
Between May 2022 and April 2023, Rimar purported to use AI to perform automated trading for advisory client accounts for a range of products including equities, futures, and crypto assets, the SEC said in its order.
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Gurbir Grewal, director of the Securities and Exchange Commission’s Division of Enforcement, laid out general principles for “proactive compliance” to avoid making false or misleading claims about the capabilities of artificial intelligence products and services.
Delphia USA and Global Predictions agreed to pay a total of $400,000 to settle charges by the Securities and Exchange Commission the firms each engaged in artificial intelligence misrepresentations that misled clients about how they were using the technology.
Federal agencies, including the Securities and Exchange Commission, Department of Justice, and Federal Trade Commission, are taking every opportunity to warn firms that how they use—and represent their use of—artificial intelligence could result in violations.
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TD Bank will pay nearly $3.1 billion in penalties to four U.S. regulators to settle charges that it “chose profits over compliance” when it allowed three money laundering networks to filter more than $670 million in dirty money through the company.
Electric vehicle maker Fisker is under investigation by the Securities and Exchange Commission over potential violations of federal securities laws related to the preservation of records and documents involving its Chapter 11 bankruptcy filing.
