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False Statements Misleading Statements Enforcement Actions

Benesch

Fraud by Omission? How Thompson v. United States Could Narrow the Reach of the Federal Wire, Mail, and Bank Fraud Statutes

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The vast majority of federal white-collar fraud enforcement actions are prosecuted under the wire, mail, or bank fraud statutes.  18 U.S.C. §§ 1341, 1343, and 1344. The Supreme Court’s recent decision in Thompson v. United...more

ArentFox Schiff

FTC Continues to Target Misleading ‘Made in USA’ Claims

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The Federal Trade Commission (FTC) has continued its crackdown on false and misleading “Made in USA” claims. Since finalizing the Made in the USA Labeling Rule in 2021, which authorizes the agency to levy civil penalties...more

Freiberger Haber LLP

Enforcement News: Cherry-Picking Scheme Back In The News

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Two weeks ago, this Blog wrote about an enforcement action involving an investment adviser’s former co-chief investment officer who had been charged with running a more than $600 million cherry-picking scheme (here). Today,...more

The Volkov Law Group

DOJ Indicts Indian Billionaire and Seven Other Individuals for Bribery and Fraud Scheme Involving Payments to Indian Government...

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In a far-reaching criminal case, in November 2024, the Justice Department unsealed a complex, five-count indictment in the Eastern District of New York charging eight defendants, including Gautam S. Adani, Sagar R. Adani and...more

Pillsbury Winthrop Shaw Pittman LLP

Disclosure of Non-GAAP Financial Measures: Recent SEC Comments and Enforcement Actions

The U.S. Securities and Exchange Commission (SEC) continues to scrutinize adjustments to, and presentation of, non-GAAP financial measures. Recent SEC enforcement actions for allegedly improper and misleading use of...more

BCLP

Artificial Intelligence Stays in the SEC's Cross-Hairs

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As news stories about AI have surged, so have enforcement actions by the SEC alleging fraudulent statements about AI capabilities....more

Quarles & Brady LLP

Texas Attorney General Obtains Settlement of Alleged False and Misleading Statements About Healthcare Artificial Intelligence...

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On September 18, 2024, the Attorney General (AG) of Texas announced a settlement with an artificial intelligence-focused healthcare technology company to resolve allegations of false and misleading statements about the...more

WilmerHale

Texas Attorney General’s Office Reaches Settlement with AI Company Over Deceptive Claims

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On September 18, the Texas Attorney General (AG) announced a settlement agreement with Pieces Technologies, Inc. (“Pieces”), a Dallas-based healthcare artificial intelligence (AI) research and development firm, resolving...more

Foley & Lardner LLP

Don’t Buy The Buzzwords: “AI Washing” Gets Its Reckoning

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Since the release of ChatGPT 3.5 in November 2022, public interest in artificial intelligence (AI) has surged in a classic example of a hype cycle. As with past technological breakthroughs, companies may be tempted to...more

BCLP

SEC and DOJ Heighten Focus on AI Washing

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The SEC recently charged Ilit Raz, the CEO of Joonko Diversity Inc., a failed recruitment startup, with "AI washing" based on allegedly false claims that her company had developed an “automatic recruiting solution” to help...more

Carlton Fields

Cinch Up! AI Enforcement Starts With Washing Charges

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In March 2024, the SEC announced that it settled two cases against investment advisers Delphia (USA) Inc. and Global Predictions Inc. for making false and misleading statements about their purported use of artificial...more

Holland & Knight LLP

Beyond the Hype: The SEC's Intensified Focus on AI Washing Practices

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The U.S. Securities and Exchange Commission (SEC) is cracking down on how firms promote their artificial intelligence (AI) technologies to protect investors from falling victim to "AI-washing." On March 18, 2024, the SEC...more

Morgan Lewis

SEC Charges Investment Advisers with Making False and Misleading Statements About Their Use of AI

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On March 18, the US Securities and Exchange Commission (SEC) announced the first AI-related settled actions against two investment advisers—Delphia (USA) Inc. and Global Predictions Inc.—for making false and misleading...more

Orrick, Herrington & Sutcliffe LLP

AI Washing: SEC Enforcement Actions Underscore the Need for Companies to Stick to the Facts on Artificial Intelligence

The SEC settled charges last week against two investment advisers for making false and misleading statements about their purported use of artificial intelligence (AI), including claims that AI was used to inform investment...more

Bilzin Sumberg

SEC Issues First AI-Related Civil Penalties and Warns Against “AI Washing”

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​​​​​​​The Securities and Exchange Commission on Monday, March 18, 2024, entered into settlements with Delphia (USA) and Global Predictions, which agreed to pay civil penalties totaling $225,000 and $175,000, for “AI...more

Sheppard Mullin Richter & Hampton LLP

SEC Cracks Down on Over-Hyped AI Claims – Director Says This is Just the Beginning

The SEC has charged and settled claims with two Investment advisers with making false and misleading statements about their use of artificial intelligence (AI). The SEC found that Delphia (USA) Inc. and Global Predictions...more

Morrison & Foerster LLP

Top 5 SEC Developments for August 2023

In order to provide an overview for busy in-house counsel and compliance professionals, we summarize below some of the most important SEC enforcement developments from the past month, with links to primary resources. This...more

Nelson Mullins Riley & Scarborough LLP

March Madness: “The Truth” Fined by the SEC for Not Shooting Straight in Crypto Promotion

NBA Hall of Famer Paul Pierce, known by basketball fans as “The Truth,” has run afoul of the SEC. No, not that SEC—Pierce played college basketball at Kansas in the Big 12. No, this would be the U.S. Securities and Exchange...more

A&O Shearman

Western District Of New York Holds That Desire To Raise Capital In Specific Offering Can Provide A Basis to Infer Scienter

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On January 6, 2023, Judge John L. Sinatra, Jr. of the United States District Court for the Western District of New York denied a motion to dismiss claims against a cannabis and tobacco engineering company (the “Company”)...more

Wilson Sonsini Goodrich & Rosati

Gig Economy, Dark Patterns, and Impersonation Scams: FTC Signals Priorities in Open Commission Meeting

On September 15, 2022, the Federal Trade Commission (FTC) held an open Commission meeting that covered three agenda items: 1) a rulemaking on impersonation scams, 2) a policy statement on enforcement related to gig work, and...more

Robinson+Cole Health Law Diagnosis

A COVID-19 Laboratory Testing Conviction under EKRA

Mark Schena, the President of Arrayit Corporation, has been found guilty by a jury for violations of the Eliminating Kickbacks in Recovery Act (EKRA), healthcare fraud, wire fraud, and securities fraud....more

Cadwalader, Wickersham & Taft LLP

FDIC Continues Cease and Desist Sweep Regarding Deposit Insurance and Crypto

A couple of weeks ago, we reported on the FDIC and the Federal Reserve Board sending a cease and desist (“C&D”) letter to Voyager Capital to stop representing that customer funds were protected by deposit insurance. This past...more

Dechert LLP

FDIC Issues Cease and Desist Letter to Voyager Digital, LLC; Fact Sheet on Deposit Insurance and Cryptocurrency

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The Federal Deposit Insurance Corporation and the Board of Governors of the Federal Reserve System (Board of Governors) issued a joint letter (Joint Letter) on July 28, 2022, to Voyager Digital, LLC and its related entities...more

Seward & Kissel LLP

SEC Charges Schwab for Misleading Investors about Robo-Adviser’s Fees

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On June 13, 2022, the Securities and Exchange Commission (“SEC”) entered a settled order (“Order”) against three of The Charles Schwab Corporation’s investment adviser subsidiaries (collectively, “Schwab”) on charges that...more

Jones Day

SEC Brings Landmark Suit Over Alleged Misrepresentations in ESG-Related Documents

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The U.S. Securities and Exchange Commission's ("SEC") Climate and ESG Task Force has filed one of its most significant enforcement matters to date. On April 28, 2022, the SEC brought an action in the U.S. District Court for...more

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