SEC v. Delphia & Global Predictions — First AI-Washing Enforcement
United States · In re Delphia (USA) Inc., Securities Act Rel. No. 11264 (Mar. 18, 2024); In re Global Predictions Inc., Securities Act Rel. No. 11265 (Mar. 18, 2024)
The SEC charged two investment advisers — Delphia (USA) and Global Predictions — with making false and misleading statements about using AI and machine learning. The firms paid $400,000 combined in civil penalties. It was the SEC's first 'AI-washing' enforcement action and signals scrutiny of overstated AI capability claims in financial services.
Technical detail
SEC orders (33-11264 / 34-99704; 33-11265 / 34-99705) under Securities Act § 17(a)(2) and Investment Advisers Act § 206(2) and (4): Delphia falsely claimed it used 'collective data' to power an AI that 'predicts which companies and trends are about to make it big'; Global Predictions falsely claimed to be the 'first regulated AI financial advisor.' $225K and $175K penalties respectively; cease-and-desist orders.
Who is protected: Retail investors and advisory clients
Who must comply: Registered investment advisers and broker-dealers marketing AI/ML capabilities
Key facts
| Jurisdiction | United States |
|---|---|
| Level | Federal |
| Status | In effect |
| Protection strength | Moderate protection |
| Effective date | 2024-03-18 |
| Enacted | 2024-03-18 |
| Citation | In re Delphia (USA) Inc., Securities Act Rel. No. 11264 (Mar. 18, 2024); In re Global Predictions Inc., Securities Act Rel. No. 11265 (Mar. 18, 2024) |
| Enforced by | Securities and Exchange Commission |
| Private right of action | No — agency enforcement only |
| Penalties | $225K (Delphia) + $175K (Global Predictions) civil penalties; cease-and-desist |
| Topics | consumer protection · AI disclosure and transparency · automated decision-making |
| Last verified | 2026-06-17 |
| Official source | SEC Charges Two Investment Advisers with Making False and Misleading Statements About Their Use of Artificial Intelligence ↗ |
More AI rules in United States
- FTC Act Section 5 (unfair/deceptive AI) · In effect
- TAKE IT DOWN Act · In effect
- FCRA (AI in credit & background checks) · In effect
- ECOA / Regulation B (AI credit discrimination) · In effect
- Title VII / ADA (AI hiring) · In effect
- COPPA + 2025 Rule (childrens data) · In effect
Related consumer protection rules elsewhere
- CCPA/CPRA + ADMT Regulations · In effect
- AB 2013 (Training Data Transparency) · In effect
- SB 942 (AI Transparency Act) · Enacted (not yet in effect)
- SB 53 (Frontier AI Safety) · In effect
- Colorado AI Act (repealed) · Repealed / replaced
- SB 26-189 (Colorado ADMT Law) · Enacted (not yet in effect)
See something wrong or out of date? Submit a correction — every entry must carry a verifiable official source.