# Delphia / Global Predictions AI-washing settlements: SEC Charges Two Investment Advisers with Making False and Misleading Statements About Their Use of Artificial Intelligence

Source: https://www.bankingnewsai.com/ai-regulation/documents/sec-delphia-global-predictions-ai-washing-2024
Last updated: Aug 26, 2026

On March 18, 2024 the SEC announced settled charges against investment advisers Delphia (USA) Inc. and Global Predictions Inc. for false and misleading statements about their use of artificial intelligence — the first 'AI washing' enforcement actions. Delphia paid a $225,000 civil penalty for claiming from 2019 to 2023 that it used AI and machine learning on client data when it did not; Global Predictions paid $175,000 for calling itself the 'first regulated AI financial advisor' and promising 'expert AI-driven forecasts' it could not deliver. Both were censured, ordered to cease and desist, and found to have violated the Advisers Act Marketing Rule.

## At a glance

| Field | Value |
| --- | --- |
| Authority | [SEC](https://www.bankingnewsai.com/ai-regulation/sec) |
| Type | Enforcement |
| Status | Final |
| Published | Mar 18, 2024 |
| Applies to | SEC-registered investment advisers, including bank-owned advisers and wealth-management units |
| Official text | https://www.sec.gov/newsroom/press-releases/2024-36 |

## Key points

- Total civil penalties of $400,000 ($225,000 Delphia; $175,000 Global Predictions).
- Delphia's misstatements appeared in SEC filings (Form ADV), a press release, and its website — not just marketing.
- Global Predictions also violated the Marketing Rule on tax-loss harvesting claims and included an impermissible liability hedge clause in its advisory contract.
- Charged under the Advisers Act antifraud provisions and the Marketing Rule (Rule 206(4)-1), which bars untrue statements of material fact in advertisements.
- Chair Gensler: 'Investment advisers should not mislead the public by saying they are using an AI model when they are not. Such AI washing hurts investors.'

## What changed for banks

It established that claiming AI capabilities you do not have is a Marketing Rule and antifraud violation, without any AI-specific rule. Bank advisory units responded by requiring substantiation files for AI claims in pitch books, websites, and Form ADV Part 2.

## Use cases it governs

- [AI governance (general)](https://www.bankingnewsai.com/ai-regulation/by-use-case#governance-general)
- [Model risk management](https://www.bankingnewsai.com/ai-regulation/by-use-case#model-risk)

## FAQ

### What were the penalties in the Delphia and Global Predictions cases?

$225,000 for Delphia and $175,000 for Global Predictions — $400,000 in total — plus censure and cease-and-desist orders.

### Which rule did the SEC use to charge AI washing by advisers?

The Advisers Act antifraud provisions and the Marketing Rule (Rule 206(4)-1), which prohibits advertisements containing untrue statements of material fact.

## Related documents

- [Atkins remarks at Investor Advisory Committee (Sep 2026)](https://www.bankingnewsai.com/ai-regulation/documents/sec-atkins-iac-ai-disclosure-remarks-2026-09) — Remarks at the SEC Investor Advisory Committee Meeting on AI Technologies and the Public Markets Information Ecosystem (Sep 10, 2026)
- [Atkins remarks at FSOC AI roundtable (Mar 2026)](https://www.bankingnewsai.com/ai-regulation/documents/sec-atkins-fsoc-ai-roundtable-2026) — Remarks at Financial Stability Oversight Council Artificial Intelligence Innovation Series Roundtable on Strategy and Governance Principles (Mar 4, 2026)
- [Investor Advisory Committee AI disclosure recommendation](https://www.bankingnewsai.com/ai-regulation/documents/sec-iac-ai-disclosure-recommendation-2025) — Recommendation of the SEC Investor Advisory Committee Regarding the Disclosure of Artificial Intelligence's Impact on Operations (Dec 4, 2025)
- [Division of Examinations FY2026 Priorities](https://www.bankingnewsai.com/ai-regulation/documents/sec-exam-priorities-fy2026) — Examination Priorities: Fiscal Year 2026 — Division of Examinations (Nov 17, 2025)
- [SEC withdrawal of proposed rules (33-11377)](https://www.bankingnewsai.com/ai-regulation/documents/sec-pda-proposal-withdrawal-33-11377) — Withdrawal of Proposed Regulatory Actions — including the predictive data analytics conflicts proposal (Jun 12, 2025)
- [SEC v. Saniger (Nate, Inc.)](https://www.bankingnewsai.com/ai-regulation/documents/sec-nate-saniger-ai-washing-2025) — SEC Charges Founder of Nate, Inc. with Fraud Over False Claims About the Company's Use of Artificial Intelligence (Apr 9, 2025)
- [Presto Automation AI-washing order](https://www.bankingnewsai.com/ai-regulation/documents/sec-presto-automation-ai-washing-2025) — SEC Charges Restaurant-Technology Company Presto Automation for Misleading Statements About AI Product (Jan 14, 2025)
- [Division of Examinations FY2025 Priorities](https://www.bankingnewsai.com/ai-regulation/documents/sec-exam-priorities-fy2025) — Examination Priorities: Fiscal Year 2025 — Division of Examinations (Oct 21, 2024)

Last reviewed Aug 26, 2026. Cite the official text (https://www.sec.gov/newsroom/press-releases/2024-36) for the rule and this page for the summary and dates.

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