During a Senate oversight hearing, Gary Gensler confirmed that the SEC was currently using artificial intelligence (AI) technologies for surveillance over the financial sector
In a response to a query from Sen. Catherine Cortez Masto during a Senate oversight hearing, the United States Securities and Exchange Commission (SEC) Chair Gary Gensler testified that the regulator used AI to monitor the financial sector for signs of fraud and manipulation.
Apparently, the SEC sees potential in this AI use case, since Mr. Gensler called AI-enabled surveillance “one of the reasons why we’ve asked Congress for greater funding this year, in 2024, to help build up our technology budget for the emerging technologies.”
As we have previously reported, besides promoting AI use, the SEC also aims to regulate the use of artificial intelligence-based tools. Explaining the agency’s position, the SEC chair stressed that advanced technology can be guided by logical thinking algorithms that are based on historical biases, as well as push the interests of investors instead of prioritizing the benefit of customers and retail buyers.
According to Gary Gensler, public companies should inform investors about the opportunities and risks associated with using artificial intelligence-based tools.
Although Mr. Gensler didn’t specify the type of AI tools the SEC uses, he did clarify they were applied in “some market surveillance and enforcement actions.” Presumably, the regulator uses machine learning algorithms while screening large amounts of financial information for anomalous data.
