Canada-based Delphia and San Francisco-headquartered Global Predictions will cough up $225,000 and $175,000 respectively for telling clients that their products used AI to improve forecasts. The financial watchdog said both were engaging in"AI washing," a term used to describe the embellishment of machine-learning capabilities.
Delphia claimed its system utilized AI and machine learning to incorporate client data, a statement the SEC said it found to be false. Despite being warned about suspected misleading practices in 2021 and agreeing to amend them, Delphia only partially complied, according to the SEC. The company continued to market itself as using client data as AI inputs but never did anything of the sort, the regulator said.
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