In Law360, Shannon Capone Kirk and Amy Jane Longo Discuss AI Washing Enforcement

In an article for Law360: Insurance Authority, managing principal and global head of advanced e-discovery and A.I. strategy Shannon Capone Kirk and litigation & enforcement partner Amy Jane Longo discuss the first lawsuits by regulators and investors over alleged misrepresentation of artificial intelligence use, often referred to as AI washing.

“What distinguishes AI washing from greenwashing, which is misrepresenting a company's environmental impact, is the way that the legal community is grappling with finding a shared definition,” said Shannon. “We all have to speak the same language and have the same understanding before we can have rules and laws and regulations that map to that.”

“I would describe the kinds of cases we're seeing so far from the SEC as low-hanging fruit,” said Amy. They “don't get terribly deep into the weeds on how the technology is used.”

Amy noted that investment advisers are subject to a higher degree of scrutiny by the SEC under a variety of adviser-specific rules. She said that investment advisers and broker-dealers face routine inspections of their operations, including marketing material, by the agency's Division of Examination, adding that “the examinations process can be a pipeline to the enforcement arena.”