In recent public addresses, officials from both the Department of Justice and the Securities and Exchange Commission issued stern warnings against the misuse of AI for fraudulent purposes.
SEC Chair Gary Gensler, speaking at Yale Law School, emphasized the potential benefits of AI in finance but cautioned against its misuse, citing risks such as biased decision-making and conflicts of interest.
Gensler announced proposed rulemaking to prevent brokerage firms from prioritizing their interests over investors’, aiming for adoption by year-end.
The following day at the University of Oxford, DOJ Deputy Attorney General Lisa Monaco echoed concerns about AI misuse, labeling it a threat to democracies worldwide. Monaco announced the launch of the “Justice AI” initiative to address these risks, involving collaboration with experts globally.
She likened AI’s misuse to the danger of firearms in criminal activity and pledged tougher penalties for offenses exacerbated by AI misuse, proposing reforms to sentencing guidelines if necessary.
Companies integrating AI into their products or partnering with AI-centric providers should heed regulators’ warnings, she noted, adding that ensuring compliance through thorough testing and diligence to mitigate potential harm to consumers is key.
