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Misleading Statements Securities Regulation

White & Case LLP

Evolution of AI Washing Enforcement: DOJ Enters the Picture

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On April 9, the US Department of Justice and Securities and Exchange Commission announced parallel cases against the founder and former CEO of an artificial intelligence startup for allegedly misleading investors about his...more

DLA Piper

DOJ and SEC Send Warning on “AI Washing” with Charges Against Technology Startup Founder

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The US Department of Justice (DOJ) announced a criminal indictment and the Securities and Exchange Commission (SEC) announced a civil complaint against the founder and former CEO of an e-commerce technology startup. DOJ and...more

Harris Beach Murtha PLLC

SEC Enforcement Action in SDNY Highlights Risks for AI Companies

On April 9, 2025, the Securities and Exchange Commission (SEC) filed a complaint in the U.S. District Court for the Southern District of New York against Alberto Saniger Mantinan, the founder and CEO of Nate, Inc. The SEC...more

A&O Shearman

Central District Of California Grants Motion To Dismiss Putative Securities Class Action Against Plant-Based Meat Substitute...

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On February 26, 2025, Judge Michael W. Fitzgerald of the United States District Court for the Central District of California granted a motion to dismiss a putative class action against a producer of plant-based meat...more

Carlton Fields

SEC Commissioners on the Hunt for Materiality: Disagree on Cybersecurity Enforcement Actions

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On October 22, 2024, Republican SEC Commissioners Hester Peirce and Mark Uyeda issued a joint dissent sharply criticizing charges brought against four companies for allegedly making materially misleading disclosures regarding...more

A&O Shearman

Southern District Of New York Dismisses Exchange Act Claims Against Specialty Insurance Underwriter For Failure To Plausibly...

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On December 12, 2024, Judge Lewis A. Kaplan of the United States District Court for the Southern District of New York granted a motion to dismiss a putative securities class action asserting claims under Sections 10(b) and...more

Jones Day

United States Supreme Court to Hear Two Securities Cases This Term

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The Supreme Court is set to hear arguments in two cases concerning the pleading standard in securities fraud class actions....more

Kohrman Jackson & Krantz LLP

Keurig Pays the Price for Misleading 'Recyclable' K-Cup Claims

The Securities and Exchange Commission (SEC) recently charged Keurig Dr Pepper Inc. with making inaccurate statements about the recyclability of its K-Cup single-use beverage pods in violation of securities laws. The case...more

Steptoe & Johnson PLLC

New York Federal Court Refuses to Extend Accounting Controls Requirements to Cybersecurity Controls

Section 13(b)(2)(B) of the Securities Exchange Act of 1934 requires public companies to “devise and maintain a system of internal accounting controls.” In a recent opinion, a New York federal court rejected the Securities...more

Skadden, Arps, Slate, Meagher & Flom LLP

Takeaways From the Dismissal of SEC Claims Against SolarWinds and Its CISO

The U.S. District Court for the Southern District of New York has dismissed many of the Securities and Exchange Commission’s (SEC’s) claims against software development company SolarWinds and its chief information security...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

White & Case LLP

New Settlements Demonstrate the SEC’s Ongoing Efforts to Hold Companies Accountable for AI-Washing

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In the past few months, we have published several alerts concerning the increase in regulatory attention to "AI washing," or making unfounded claims regarding artificial intelligence ("AI") capabilities.1 Senior officials at...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

Jones Day

2023 Securities Litigation Year in Review

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During 2023, securities lawsuit filings rose for the first time in four years. Settlements declined last year; there were nine mega-settlements of more than $100 million, including a $1 billion settlement. Case filings...more

Troutman Pepper Locke

Exercise Caution Before Stating a Lawsuit is "Without Merit"

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Many publicly reporting companies often respond to lawsuits by characterizing them as “without merit” in their securities filings. If the company does not prevail in such litigation, can it still be held responsible for...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

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

Bilzin Sumberg

SEC's Proposed Rule Changes Seek to Curb Greenwashing

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We have previously written about the Securities and Exchange Commission (“SEC”) considering additional regulations on statements and disclosures made by public companies and investment funds relating to their credentials on...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

Bilzin Sumberg

SEC’s $1 Million Settlement with Pearson Over Botched Data Breach Disclosure Is A Cautionary Tale for Public Companies

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Careful—and truthful—reporting of a data breach should be a must for any company. But nowhere is this truer than for publicly traded companies. A recent Securities and Exchange Commission Order highlights how costly...more

Farrell Fritz, P.C.

“Do Your Homework!”: SEC Order Sends Strong Message to SPAC Participants on Due Diligence

Farrell Fritz, P.C. on

The Securities and Exchange Commission announced on July 13, 2021 that it settled fraud charges against a special purpose acquisition company, its sponsor, its sponsor’s CEO and its proposed merger target for making...more

Cooley LLP

Blog: SEC brings first action for misleading disclosures regarding impact of COVID-19

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In its first action against a public company for misleading investors about the financial effects of the pandemic, the SEC has announced settled charges against The Cheesecake Factory. In mid-March, the company, which...more

Polsinelli

The Cheesecake Factory has settled charges with the SEC for Misleading COVID-19 Disclosures

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The SEC has just announced settled charges against The Cheesecake Factory Incorporated for making misleading disclosures about the impact of the COVID-19 pandemic on its business operations and financial condition. The SEC...more

Hogan Lovells

U.S. SEC takes emergency action against former state senator to halt digital asset scam

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The U.S. Securities and Exchange Commission (SEC) has obtained an asset freeze and other emergency relief to stop an alleged securities fraud by former Washington state senator David Schmidt and two others, who dishonestly...more

Robins Kaplan LLP

When Does a Tweet Fall Afoul of Regulation FD

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On August 7, 2018, Tesla CEO Elon Musk used his personal Twitter account (@elonmusk) to propose a buyout of the company for $420 a share, stating that funding was secured....more

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