The Securities and Exchange Commission (SEC) is set to address two critical issues at a public meeting on March 6: the harmonization of artificial intelligence (AI)-related disclosures across industries and the growing threat of AI-driven retail investor fraud.
The SEC’s Investor Advisory Committee (IAC) will oversee the panels, which will take place at the SEC Headquarters in Washington, D.C., and be webcast on the commission’s website, as announced in a February 27 press release. The IAC plays a key role in advising the SEC on regulatory priorities and investor protection.
AI Disclosure Challenges
One panel, focusing on “Disclosure of Artificial Intelligence’s Impact on Operations,” will tackle the challenges investors face assessing risks and opportunities when AI-related disclosures vary significantly by industry. The meeting agenda indicates the panel aims to explore how the SEC can harmonize the AI disclosure regime to provide investors with the information they need, with a specific emphasis on AI’s impact on corporate operations and financial disclosures.
Combating Retail Investor Fraud
The second panel, titled “Retail Investor Fraud in America,” will delve into the economic impact and mechanics of retail investor fraud, particularly how fraudsters are leveraging AI and other technologies to deceive investors. Panelists will include securities regulators and fraud experts who will discuss their efforts to combat these scams, followed by a moderated discussion.
This initiative comes after the SEC established a new Cyber and Emerging Technologies Unit (CETU) on February 20 to safeguard retail investors from fraud. This unit, staffed by approximately 30 fraud specialists and attorneys, will focus on fraud involving emerging technologies like AI and machine learning, as well as those committed through social media, the dark web, and false websites.
According to a press release at the time, acting SEC Chair Mark Uyeda stated the CETU would “not only protect investors but will also facilitate capital formation and market efficiency by clearing the way for innovation to grow.”
