Individual Action
SEC v. Delphia (AI-Washing)
In the Matter of Delphia (USA) Inc.
Where it stands
Settled cease-and-desist order instituted and simultaneously resolved March 18, 2024. Delphia was censured, ordered to cease and desist, and paid a $225,000 civil penalty, without admitting or denying the findings. Together with Global Predictions, this was the SEC's first 'AI washing' enforcement sweep.
Key ruling
Order instituting administrative and cease-and-desist proceedings under Advisers Act §§ 203(e) and 203(k); violations found of Advisers Act §§ 206(2) and 206(4) and Rules 206(4)-1 and 206(4)-7 (the Marketing Rule). Entered by settled cease-and-desist order, without the respondent admitting or denying the findings.
Note on this record
Regulatory enforcement action, not a private class action. No private securities class action against Delphia was located.The record
- Court
- U.S. Securities and Exchange Commission (administrative proceeding)
- Case number
- Admin. Proc. File No. 3-21894 (Advisers Act Release No. 6573)
- Filed
- 2024-03-18
- Defendants
- Delphia (USA) Inc.
- Plaintiffs
- Plaintiff class not established
- Technology at issue
- Delphia robo-advisory service marketed as using client data to 'make our artificial intelligence smarter'
- Relief sought
- Censure, cease-and-desist order, and civil monetary penalty
- Settlement
- $225,000 civil penalty
Claims pleaded
Sources (2)
- Order Instituting Administrative and Cease-and-Desist Proceedings — Delphia (USA) Inc., Advisers Act Release No. 6573U.S. Securities and Exchange Commission · 2024-03-18
- SEC Charges Two Investment Advisers with Making False and Misleading Statements About Their Use of Artificial IntelligenceU.S. Securities and Exchange Commission · 2024-03-18
This page describes a publicly filed case. This site is not counsel on this matter, nothing here is legal advice, and the allegations described are allegations unless a court has said otherwise.