AI Washing and SEC Enforcement Quiz

Answers and explanations appear as you take the quiz.

1. Which two investment advisers settled the SEC's first AI washing cases in March 2024?
   • Presto Automation and Joonko
   • Nate and Global Predictions
   • Delphia and Presto Automation
   • Delphia and Global Predictions
2. What were the combined civil penalties in the Delphia and Global Predictions settlements?
   • $400,000
   • $40 million
   • $4 million
   • $225,000
3. Which marketing claim was associated with Global Predictions?
   • That its app needed no human workers
   • That it was the 'first regulated AI financial advisor'
   • That its drive-thru system took orders on its own
   • That it matched job candidates with AI
4. What made the January 2025 Presto Automation case notable?
   • It was the first criminal AI washing case
   • It involved a robo-adviser's tax-loss harvesting claims
   • It was the SEC's first AI washing case against a public company
   • It led to the Marketing Rule being written
5. Which rule did the SEC rely on against the advisers, barring advertisements with material claims the firm cannot substantiate?
   • The Advisers Act Marketing Rule
   • FINRA Rule 3110
   • Regulation S-P
   • Regulation Best Interest
6. What was the core allegation against the founder of the shopping app Nate?
   • Hiding a data breach from investors
   • Claiming automation that was largely done by human workers
   • Using clients' spending data without consent
   • Copying a competitor's model
7. According to the guide, which statement about AI washing is a misconception?
   • It can involve failing to disclose reliance on a third party's technology
   • It can involve hiding human involvement
   • It can involve exaggerating how much a real system does
   • It only covers companies that use no AI at all
8. Which marketing sentence best follows the guide's advice on describing AI truthfully?
   • Our AI protects your money around the clock
   • We are the first AI-powered adviser in the country
   • A statistical model screens securities; an investment committee makes final decisions
   • Our proprietary intelligence beats the market