AI claims: Delphia and Global Predictions
SEC Press Release 2024-36
SEC Charges Two Investment Advisers with Making False and Misleading Statements About Their Use of Artificial Intelligence
Read the current text at the source ↗Guide: AI Compliance for Investment Advisers: AI Washing, Marketing Claims, Records and Vendors
- Applies to
- SEC-registered investment adviser
- Effective
- March 18, 2024
When this applies
A settled administrative proceeding. Both firms neither admitted nor denied the Commission's findings. Nothing here is established fact about their conduct, and a settlement binds nobody else.
What the rule says
A description of the source text.
On 18 March 2024 the Commission announced settled charges against Delphia (USA) Inc. and Global Predictions Inc. over statements about their use of artificial intelligence. The SEC's orders found that Delphia claimed machine learning capabilities in its investment process between 2019 and 2023, and that Global Predictions described itself as the first regulated AI financial adviser and misrepresented AI-driven forecasting. In the Commission's words: “Without admitting or denying the SEC’s findings, Delphia and Global Predictions consented to the entry of orders finding that they violated the Advisers Act and ordering them to be censured and to cease and desist from violating the charged provisions.” Penalties were $225,000 and $175,000.
What it requires
Luna's plain-English reading, not the Commission's words.
- 01Rule 206(4)-1(a)(2) requires substantiation on demand. A claim about how the firm's technology works is a claim about a material fact, and describing a capability the firm does not have is the ordinary case, not an exotic one.
- 02The exposure is symmetric for a firm buying AI tools rather than building them: what the vendor does is a fact the adviser is stating when it repeats it.
- 03Superlatives are the highest-risk form. “First regulated” and “only” invite a substantiation demand nobody can meet.
What examiners find
Luna's observations, not a Commission publication.
- Website copy describing AI capability with no record of what the technology actually does.
- Vendor claims repeated verbatim in the firm's own materials.
Topics
Source last checked against the regulator's copy on October 14, 2026. That date is written by an automated check, not by hand.
Luna Compliance is software, not a law firm. This page is not legal advice and reading it creates no attorney-client relationship. Where this page and the regulator's copy differ, the regulator's governs.