“Old school fraud using new school buzzwords” — that is how the SEC has described its AI-washing cases, and it captures the essential point of the linked note: the Commission is not inventing new law for artificial intelligence. It is applying the same enforcement framework that brought down Theranos and Nikola to companies that overstate their use of AI and what their AI can do. With AI claims now a fixture of earnings calls, offering materials, and marketing copy, the exposure is broader than many issuers appreciate — and it reaches founders, executives, and gatekeepers personally, in civil and criminal proceedings alike.
A case to watch is SEC v. Saniger, in which the founder of shopping app Nate allegedly raised over $40 million on claims of autonomous AI that was, in fact, a team of overseas contractors placing orders by hand. Unlike its predecessors, Saniger is heading toward trial — meaning the outer limits of AI-washing liability may finally be defined in a courtroom rather than a settlement. The linked note surveys the enforcement pattern, the pending litigation, and practical steps companies should take now. As always, we welcome your questions.
Read more here: https://www.quinnemanuel.com/the-firm/publications/client-alert-the-first-real-test-what-saniger-means-for-ai-disclosure-fraud/