Artificial Intelligence (AI) and Investment Fraud
The Securities and Exchange Commission (SEC) Office of Investor Education and Advocacy, the North American Securities Administrators Association (NASAA), and the Financial Industry Regulatory Authority (FINRA) are jointly issuing this investor article to make investors aware of the increase of investment frauds involving the purported use of artificial intelligence (AI) and other emerging technologies. Individual investors should know that bad actors are using the growing popularity and complexity of AI to lure victims into scams.
Here are a few things to look out for to help you keep your money safe from these frauds:
First and foremost, investors should remember that federal, provincial and state securities laws generally require securities firms, professionals, exchanges and other investment platforms to be registered. A promoter's lack of registration status should be taken as a prompt to do additional investigation before you invest any money. Numerous unregistered and unlicensed online investment platforms, as well as unlicensed and unregistered individuals and firms, are promoting AI trading systems that make unrealistic claims like, "Our proprietary AI trading system can't lose!" or "Use AI to Pick Guaranteed Stock Winners!" In reality, these scammers are running investment schemes that seek to leverage the popularity of AI. Be wary of claims -- even from registered firms and professionals -- that AI can guarantee amazing investment returns.
Source Fool.com
