- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Aaron Nicodemus2024-04-16T19:09:00
The enforcement head at the Securities and Exchange Commission (SEC) laid out general principles for “proactive compliance” to avoid making false or misleading claims about the capabilities of artificial intelligence (AI) products and services.
In a speech delivered Monday at a compliance conference, Gurbir Grewal, director of the SEC’s Division of Enforcement, predicted a “storm of risk” is brewing around AI use, fueled by intense interest among investors and the market. This interest, he said, could lead to elevated investor risk as firms race to roll out new AI-driven products and services to improve financial decision-making, make better bets on the market, enhance productivity and growth, and attract and retain investors.
The pressure is encouraging some firms to overstate the capabilities of their AI products and services, he said.
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The Securities and Exchange Commission 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.
Gurbir Grewal, director of the Securities and Exchange Commission’s Division of Enforcement, will step down from his post Oct. 11. Grewal, who had served as the division’s director since 2021, will be replaced by Sanjay Wadhwa, currently the division’s deputy director, the SEC said.
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