- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Adrianne Appel2024-03-01T12:00:00
Federal agencies, including the Securities and Exchange Commission (SEC), Department of Justice (DOJ), and Federal Trade Commission (FTC), are taking every opportunity to warn firms that how they use—and represent their use of—artificial intelligence (AI) could result in violations.
“AI washing” has become a popular way to describe a firm or company making exaggerated claims about what its AI can do in order to boost profits and lure investors.
“Fraud is fraud, and bad actors have a new tool, AI, to exploit the public,” said SEC Chair Gary Gensler in remarks delivered at Yale Law School on Feb. 13.
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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, laid out general principles for “proactive compliance” to avoid making false or misleading claims about the capabilities of artificial intelligence products and services.
Compliance officers took to the main stage to share their experiences at Compliance Week’s 2024 National Conference, while other highlights included conversations around artificial intelligence and the modern challenges the industry is confronting.
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network issued an alert to financial institutions about their obligations to report deepfakes, warning artificial intelligence has given bad actors additional tools in their arsenal.
A nationwide rental outlet affiliated with Rent-a-Center and its chief executive have been sued by the Consumer Financial Protection Bureau for allegedly deceiving five million consumers about the terms of credit agreements.
A lack of risk visibility is causing companies to reject customers–and potentially lose money–over fears they might be in danger of violating rules around anti-money laundering and sanctions regulations.
