The post Possibilities of AI Usage in Trading Questioned: SEC Settles with Rimar LLC Over Alleged ‘AI-Washing’ Claims appeared on BitcoinEthereumNews.com.

The SEC has recently settled charges against a trading firm accused of misleading investors by falsely claiming to utilize artificial intelligence in its trading operations. Rimar USA, co-owned by Itai Liptz, attracted nearly $4 million from investors under the pretense of leveraging advanced AI technologies, only to be revealed as a case of “AI-washing.” “Buzzwords about the latest AI technology” were used deceitfully to entice investment, according to Andrew Dean, Co-Chief of the SEC’s Asset Management Unit. This article examines the SEC’s settlement with Rimar USA and the implications of misleading claims about AI in the financial sector. SEC’s Crackdown on Misleading AI Claims The recent settlement by the Securities and Exchange Commission (SEC) with Rimar USA has sent a clear message to the financial industry: misleading claims concerning technological capabilities, particularly those related to artificial intelligence, will not be tolerated. Itai Liptz, the firm’s owner and CEO, along with board member Cliffard Boro, raised significant capital from investors by asserting their revolutionary AI capabilities for automated trading across various asset classes, including cryptocurrencies. Understanding the Allegations Against Rimar USA According to the SEC’s complaint, the reality at Rimar USA starkly contrasted with its promises. While the company alleged it had developed “an artificial intelligence-driven platform” for trading assets, no such platform existed at the time of fundraising. The SEC’s findings underscore a disturbing trend of “AI-washing,” wherein firms exploit the buzz surrounding artificial intelligence to mislead investors. This practice not only undermines investor trust but also jeopardizes the integrity of the investment landscape. Financial Repercussions and Penalties for Rimar USA The penalties imposed on Rimar USA reflect the seriousness of the infractions. The firm has agreed to pay a total of $310,000 in civil penalties. Liptz specifically faces disgorgement of $213,611 along with a civil penalty of $250,000, in…

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Filed under: News - @ October 11, 2024 1:26 am