SEC to Consider How to Harmonize AI-Related Disclosures Across Industries

Artificial intelligence (AI) and retail investor fraud will be the topics of two panels that will be organized by the Securities and Exchange Commission’s (SEC) Investor Advisory Committee (IAC) and held at a public meeting on March 6.

The public meeting will be held at the SEC Headquarters in Washington, D.C., and will be webcast on the Commission’s website, the SEC said in a Thursday (Feb. 27) press release.

“The Investor Advisory Committee, which focuses on investor-related interests, advises the Commission on regulatory priorities and various initiatives to help protect investors and promote the integrity of the U.S. securities markets,” the release said.

One panel, “Disclosure of Artificial Intelligence’s Impact on Operations,” will discuss the challenges investors face in assessing and comparing risks and opportunities at a time when the risks posed by AI are disclosed in “significantly” different ways among industries, according to the meeting agenda.

“This panel will bring various stakeholders to examine how the SEC can harmonize the AI-related disclosure regime and provide the information that investors are seeking,” the agenda said. “To do that, this panel will specifically focus on AI’s impact on corporate operations and finance disclosures.”

The second panel, “Retail Investor Fraud in America,” will examine the economic impact and mechanics of retail investor fraud, including how fraudsters are using AI and other technologies to steal from Americans “at an astonishing pace.”

“Panelists include securities regulators and fraud experts who will discuss their work combatting these scams and conclude with a moderated panel discussion addressing questions from the IAC,” the agenda said.

The SEC said Feb. 20 that it created a unit to protect retail investors against fraud.

The Cyber and Emerging Technologies Unit (CETU) will be staffed by about 30 fraud specialists and attorneys from multiple SEC offices. It will focus on fraud committed with emerging technologies like AI and machine learning (ML); fraud committed through the use of social media, the dark web or “false websites;” hacking; and other issues.

“This unit will not only protect investors but will also facilitate capital formation and market efficiency by clearing the way for innovation to grow,” Mark Uyeda, the SEC’s acting chair, said at the time in a press release.

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