Delphia (USA) Inc. and Global Predictions Inc. · Governance finding · severity 3 of 5
On 18 March 2024 the SEC settled charges that two investment advisers, Delphia (USA) and Global Predictions, made false and misleading statements about their use of artificial intelligence. Per the SEC, Delphia claimed from 2019 to 2023 that it used AI and machine learning on clients' data to pick investments, though it never did; Global Predictions called itself the "first regulated AI financial advisor" and advertised "expert AI-driven forecasts" it did not have. Without admitting or denying the findings, Delphia paid $225,000 and Global Predictions $175,000, and both were censured. SEC Chair Gary Gensler said: "Such AI washing hurts investors." Law firms and legal press described them as the SEC's first AI-washing enforcement actions.
Record last reviewed Oct 21, 2026 · Markdown
Date
Institution
Delphia (USA) Inc., Global Predictions Inc.
Country
United States
AI system
Marketed AI and machine-learning investment capabilities that the SEC found the firms did not have or use
AI?
Described as AI by the institution or regulator
The institution, a regulator or a court called the system AI.
Category
Status
Settled
Severity
3 of 5
Impact
$400,000 in combined civil penalties ($225,000 Delphia, $175,000 Global Predictions) · ≈ $400,000 · Delphia managed about $7 million for about 29,000 retail accounts through robo-advisory services · The SEC orders did not quantify client losses.
What happened?
Delphia, a Toronto-based adviser registered with the SEC from 2019 to January 2024, ran a robo-advisory business managing about $7 million for about 29,000 retail accounts. From at least August 2019 to August 2023 it said in Form ADV brochures, a press release and on its website that it used artificial intelligence and machine learning to analyse clients' social media, banking and spending data to inform its investment advice. The SEC found that "no such data was being used in its investment process".[1][2]
Delphia admitted to SEC examiners in July 2021 that it had not used any client data and had not built an algorithm to use it, and agreed to correct its statements, but, per the order, further false and misleading statements continued through August 2023. Its website said Delphia would "put[s] collective data to work to make our artificial intelligence smarter so it can predict which companies and trends are about to make it big".[2]
Global Predictions, a San Francisco firm offering advice through its PortfolioPilot platform, claimed on its website, in emails and on social media in 2023 that it was the "first regulated AI financial advisor" and that its technology incorporated "[e]xpert AI-driven forecasts". The SEC found it did not, could not substantiate the "first" claim, and also falsely advertised tax-loss harvesting, overstated assets on its platform and used an impermissible hedge clause. Its own Form ADV said a chatbot communicated recommendations but did not generate them.[1][3]
Legal Dive and The Hill reported the settlements the day they were announced. A Ropes & Gray analysis published by the Harvard Law School Forum on Corporate Governance described them as "the SEC's first 'AI-washing' enforcement actions".[4][5][6]
When did it happen?
- Aug 2019
Delphia begins describing AI and machine-learning use of client data in its SEC filings and marketing.[2]
- Jul 2021
Delphia tells SEC examiners it has not used client data or built an algorithm to use it.[2]
- Aug 14, 2023
Global Predictions registers with the SEC as an internet investment adviser; its AI claims run through 2023.[3]
- Mar 18, 2024
The SEC announces settled orders: Delphia pays $225,000 and Global Predictions $175,000; both are censured.[1]
What was the impact?
- Financial: $400,000 in combined civil penalties ($225,000 Delphia, $175,000 Global Predictions) · ≈ $400,000[1][2]
- Customers: Delphia managed about $7 million for about 29,000 retail accounts through robo-advisory services[1][2]
- Other: The SEC orders did not quantify client losses.[1][2]
Severity 3 of 5: Rubric 3 (regulatory finding): settled SEC orders finding false and misleading AI claims, with censures and $400,000 in combined penalties; no client losses were quantified, which keeps it below a 4.
How did Delphia (USA) Inc. and Global Predictions Inc. respond?
Global Predictions said it "cooperated fully with the inquiry and is pleased to put this behind us. Additionally, we have clarified across our marketing how exactly we use AI." The Hill said it had asked Delphia for comment; no public statement from Delphia was found as of 2026-10-21 (searched news coverage and the SEC release). Both firms consented to the orders without admitting or denying the findings.[1][5]
What was the outcome, and did regulators act?
Both firms were censured, ordered to cease and desist from the charged violations of the Investment Advisers Act and its Marketing Rule, and paid civil penalties of $225,000 (Delphia) and $175,000 (Global Predictions). Delphia had already stopped advisory services on 31 December 2023 and withdrew its SEC registration in January 2024, per its order. The SEC Office of Investor Education and Advocacy issued an investor alert on AI and investment fraud alongside the actions.[1][2]
What is AI washing, and what did Delphia and Global Predictions do?
AI washing is the SEC's term for claiming to use artificial intelligence in ways a firm does not. Per the SEC, Delphia said for years that AI and machine learning analysed clients' personal data to pick investments when no such data was used, and Global Predictions called itself the first regulated AI financial advisor and advertised AI forecasts it did not have.
How much did Delphia and Global Predictions pay the SEC?
They paid $400,000 in total civil penalties: $225,000 from Delphia and $175,000 from Global Predictions, under settled orders announced on 18 March 2024. Both were censured and ordered to cease and desist, and neither admitted or denied the SEC's findings.
Did clients lose money because of the false AI claims?
The SEC orders did not quantify any client losses. The findings were about misleading marketing and disclosures: claims of AI capability that did not exist, plus other Marketing Rule and compliance failures. Delphia managed about $7 million for roughly 29,000 retail accounts through its robo-adviser.
Were these the SEC's first AI-washing cases?
They are widely described that way. The SEC's release framed them as actions against AI washing, and law-firm analyses, including one published by the Harvard Law School Forum on Corporate Governance, called them the SEC's first AI-washing enforcement actions. The SEC itself did not use the word first in its release.
- SEC Charges Two Investment Advisers with Making False and Misleading Statements About Their Use of Artificial Intelligence (2024-36) official
- Order Instituting Administrative and Cease-and-Desist Proceedings, In the Matter of Delphia (USA) Inc. (IA-6573) official
- Order Instituting Administrative and Cease-and-Desist Proceedings, In the Matter of Global Predictions, Inc. (IA-6574) official
- SEC fines companies $400,000 for false AI claims news
- SEC fines two investment firms for 'AI washing' news
- Decoding the SEC's First "AI-Washing" Enforcement Actions news
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