The hot new scam on Wall Street

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A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link. There’s a hot new scam on Wall Street, and, of course, it involves the world’s buzziest technology: artificial intelligence. The Securities and Exchange Commission said Monday that it had charged investment advisers Delphia and Global Predictions for making deceptive claims about their use of AI, a practice known as AI washing. Both firms agreed to settle the charges, according to the SEC. “Global Predictions cooperated fully with the inquiry and is pleased to put this behind us. Additionally, we have clarified across our marketing how exactly we use AI,” the company said in a statement to CNN on Monday. Delphia did not respond to requests for comment. The firms paid a combined $400,000 in civil penalties, according to the SEC. “We’ve seen time and again that when new technologies come along, they can create buzz from investors as well as false claims by those purporting to use those new technologies,” SEC Chair Gary Gensler said in a statement on Monday. “Such AI washing hurts investors.”