By John Filar Atwood
Crypto and SPACs are recent examples of where intense interest in an emerging technology or product increased investor risk, sometimes with disastrous results, and should put companies and investors on notice about AI, according to SEC Enforcement Director Gurbir Grewal. In remarks at the corporate compliance and enforcement spring conference, he urged proactive compliance on the part of stakeholders in the form of education, engagement, and execution.
Grewal is concerned that AI could be subject to the same “perfect storm of risk”—strong investor interest, noncompliance, weak controls, and under-empowered gatekeepers—that led to crypto market failures like FTX and Terraform. While many factors were at play, he said that a throughline is that elevated investor interest often leads to elevated investor risk.
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