On February 13, 2024 SEC Chair Gary Gensler used a Yale Law School speech to put 'AI washing' on the record as a securities-law problem: public companies and investment advisers that overstate their AI use or make boilerplate AI disclosures risk violating the antifraud provisions. He also flagged 'macro' risks — model and data-source monoculture leading to herding — and 'micro' issues of deception, hallucination, and conflicts in adviser and broker AI. The Delphia and Global Predictions settlements followed five weeks later.
| Document | Gensler 'AI washing' remarks at Yale (Feb 2024) — AI, Finance, Movies, and the Law — Prepared Remarks Before the Yale Law School |
| Issued by | U.S. Securities and Exchange Commission |
| Type | Speech |
| Status | Final |
| Published | Feb 13, 2024 |
| Applies to | Public companies (including bank holding companies), broker-dealers, and investment advisers |
| Official source | sec.gov ↗ |
| Use cases | AI governance (general) · Generative & agentic AI · Model risk management |
What are the key points of Gensler 'AI washing' remarks at Yale (Feb 2024)?
- Coined the enforcement frame: 'AI washing' — claims about AI that are false, misleading, or not particularized to the company — can breach securities laws.
- Told issuers to ask whether AI discussed on earnings calls or with the board is material, and if so to disclose it specifically rather than generically.
- Warned advisers and brokers that AI does not change their fiduciary or Reg BI obligations, including managing conflicts in recommendation engines.
- Raised systemic concern about dependence on a handful of foundation models and data aggregators.
What did Gensler 'AI washing' remarks at Yale (Feb 2024) change for banks?
It converted AI disclosure from a marketing question into a liability question for bank holding companies and their advisory arms. Investor-relations and compliance teams began reviewing 10-K risk factors, MD&A, and adviser marketing for AI claims that could not be substantiated.
When did the SEC first warn about AI washing?
Chair Gensler's February 13, 2024 Yale Law School speech was the first extended public statement; the first settled cases (Delphia and Global Predictions) came March 18, 2024.
Does AI washing apply to banks?
Yes, to any SEC-reporting bank holding company's filings and public statements, and to bank-affiliated advisers' and broker-dealers' marketing.
| Date | Document | Status |
|---|---|---|
| Mar 4, 2026 | Atkins remarks at FSOC AI roundtable (Mar 2026) — Remarks at Financial Stability Oversight Council Artificial Intelligence Innovation Series Roundtable on Strategy and Governance Principles | Final |
| Dec 4, 2025 | Investor Advisory Committee AI disclosure recommendation — Recommendation of the SEC Investor Advisory Committee Regarding the Disclosure of Artificial Intelligence's Impact on Operations | Final |
| Nov 17, 2025 | Division of Examinations FY2026 Priorities — Examination Priorities: Fiscal Year 2026 — Division of Examinations | In force |
| Jun 12, 2025 | SEC withdrawal of proposed rules (33-11377) — Withdrawal of Proposed Regulatory Actions — including the predictive data analytics conflicts proposal | Final |
| Apr 9, 2025 | SEC v. Saniger (Nate, Inc.) — SEC Charges Founder of Nate, Inc. with Fraud Over False Claims About the Company's Use of Artificial Intelligence | Final |
| Jan 14, 2025 | Presto Automation AI-washing order — SEC Charges Restaurant-Technology Company Presto Automation for Misleading Statements About AI Product | Final |
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