The US Securities and Exchange Commission is increasing oversight of AI companies, focusing on the transparency of financial reporting and risk disclosures. David Hirsch, director of the enforcement division, stated that the regulator is scrutinizing high expenditures and potential circular transactions that could inflate a market bubble.
The SEC aims to ensure investors receive accurate information rather than hindering innovation. Hirsch warned that companies failing to meet disclosure requirements will face enforcement actions. The regulator is particularly concerned about the sustainability of massive AI investments amid recent volatility in tech stocks.
Furthermore, the agency is monitoring how AI tools facilitate fraud and is urging financial institutions to protect retail investors. The SEC is also investigating private markets for conflicts of interest and asset valuation issues, while evaluating whether prediction platforms like Polymarket and Kalshi fall under its jurisdiction.
