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US justice department to target pre-IPO artificial intelligence frauds: top attorney

Economic TimesEconomic Times · 7m
US justice department to target pre-IPO artificial intelligence frauds: top attorney

The US Justice Department in San Francisco is targeting AI and tech startups committing fraud before going public, according to federal prosecutor Ismail Ramsey. Given the office's proximity to Silicon Valley, Ramsey believes they are well-positioned to crack down on startups misleading investors on the path to initial public offerings. Startups often use deceptive tactics to generate interest in prospective offerings, such as exaggerating customer reach, revenue, and product readiness. Ramsey also highlighted AI as an area prone to false and exaggerated claims by fraudsters. The government has been increasing scrutiny of AI, with the SEC recently fining two investment advisers over AI-related statements.

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