By Pensions&Investments
Published on February 13, 2024
Artificial intelligence opens up tremendous opportunities for humanity, but also presents challenges for regulators to tackle, like conflicts of interests in the investing space, according to SEC Chair Gary Gensler.
“If the optimization function in an AI system is taking the interest of the platform into consideration ahead of the customer, that’s a problem,” Gensler said in a Feb. 13 speech at the Yale Law School. In finance, when brokers or advisers act on those conflicts and place their interests ahead of their investors’ interests, investors may suffer financial harm, he added.
Gensler said that logic is why the SEC in July issued its artificial intelligence conflict-of-interest proposal.