AI failures · Misrepresented AI capability
SEC Charges Delphia and Global Predictions for False AI Claims ('AI-Washing')
Verified Checked against its sources on 2 sources quoted
- Where it happened
- United States
- Organization
- Delphia Inc.; Global Predictions Inc.
- Date
- March 18, 2024
- Function
- Finance
- Where it happened
- Investment management; marketing
- System
- AI investment tools (claimed)
- Technology
- Machine learning
- Type of failure
- Misrepresented AI capability
- Caught by
- A regulator
Summary
On March 18, 2024, the SEC announced settled charges against two investment advisers, Delphia (USA) Inc. and Global Predictions Inc., for false and misleading statements about their use of artificial intelligence. Delphia had claimed its AI and machine learning used client data to inform investment advice when no such data was used; the SEC's Division of Examinations found the statements during an examination. Global Predictions falsely called itself the first regulated AI financial advisor. Without admitting or denying the findings, the firms were censured and paid civil penalties of $225,000 (Delphia) and $175,000 (Global Predictions).
Consequence
- Civil penalties of $225,000 (Delphia) and $175,000 (Global Predictions), $400,000 in total, under settled SEC orders
Who caught it A regulatorFound outside the organization
Analysis
What could have been done
Evidence behind claims about AI
Public statements about AI capability are backed by evidence before they are made.
In settled SEC orders, entered without the firms admitting or denying the findings, the SEC found that Delphia claimed its AI and machine learning used client data to inform investment advice when no such data was used, and Global Predictions falsely called itself the first regulated AI financial advisor; Delphia's misstatements were found in an SEC examination.
What would likely have prevented it
- Require every public statement about AI capability or data use to be matched to evidence of the system as it currently operates, and approved by a named owner with technical knowledge, before release.
- Keep an inventory of external AI claims and re-verify each when the system or the claim changes.
What would likely have caught it earlier
- Have compliance periodically test published AI claims against the system's actual data flows and features, as an examiner would.
Key dates
- March 18, 2024Event
- October 16, 2026Checked against sources
- October 18, 2026Checked against sources
- October 21, 2026Checked against sources
Developments are added when the record is reviewed. Next review: October 16, 2027.
Evidence
Each passage is quoted from its source. The quoted passages are re-checked against the live pages every month.
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Delphia agreed to pay a civil penalty of $225,000, and Global Predictions agreed to pay a civil penalty of $175,000.
Supports: Parties, date 18 Mar 2024, charges and penalties
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During an examination, the Division of Examinations discovered the various misleading statements outlined above.
Supports: How the misstatements were caught
Suggested citation. Eminence Scan, “SEC Charges Delphia and Global Predictions for False AI Claims ('AI-Washing')”, Eminence Growth Solutions, last verified October 16, 2026, https://eminencegrowthsolutions.com/tools/eminence-scan/record/fail-060/.
Using our research: you may read and quote Eminence Scan with credit to “Eminence Scan, Eminence Growth Solutions” and a link; all other rights reserved. Terms: Using our research.
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