SEC Dings Investment Advisors for AI Washing; Are Public Companies Next?
Intelligize Blog
by Adria Hunter
1d ago
You’ve heard of greenwashing and sports-washing. Let us introduce you to AI washing. In what is believed to be a first for the Securities and Exchange Commission, the agency recently settled charges against a pair of investment advisors for allegedly glamming up their expertise in artificial intelligence. Apparently, the SEC took exception to a claim by investment firm Global Predictions that it was the “first regulated AI financial advisor.” The firm also got dinged for touting “expert AI-driven forecasts,” which regulators weren’t buying. The SEC reprimanded Toronto-based firm Delphia (USA ..read more
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SEC Getting Serious About Related Party Transaction Disclosures
Intelligize Blog
by Adria Hunter
1w ago
When Martha Stewart teamed up with Skechers to launch her own line of branded footwear last year, the partnership seemed to fit like your favorite pair of slip-on sneakers. “Martha’s style is all about blending form and function,” noted an article on her website announcing the lifestyle guru was joining her friend Snoop Dogg among Skechers celebrity spokespeople. Is it a coincidence that the shoemaker has now run afoul of the Securities and Exchange Commission just one year after joining forces with the most famous insider-trading perpetrator in history? In fact, according to the SEC, the acti ..read more
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Growth of SPACs Prompts Concerns Over Audit Quality
Intelligize Blog
by Adria Hunter
1w ago
Special purpose acquisition companies – more commonly known as SPACs – have seemingly disappeared from the investing scene in recent years. And when they do make the news, it’s usually news of the wrong kind. After a tidal wave of SPACs washed over the public markets in 2020 and 2021, they quickly fell out of favor with investors. Sponsors use SPACs to bypass the usual steps required to hold an initial public offering. The SPACs are listed on exchanges as shell companies to amass capital for acquisitions of private companies. Once these acquisitions go final, the acquired companies have effect ..read more
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Recent Court Decisions Add to Uncertainty for Businesses
Intelligize Blog
by Adria Hunter
2w ago
A constitutional ruling by an Alabama judicial body has the rest of the country wondering about its potentially widespread implications. Sound familiar? We’re not talking about the Alabama Supreme Court ruling that embryos created through IVF are children, but another recent decision. This one, by an Alabama federal court, found the Corporate Transparency Act to be unconstitutional. And like other recent legal challenges, it has placed the business community in a state of limbo. The CTA requires reporting companies to disclose information about their so-called beneficial owners to the Fin ..read more
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Climate Disclosure Convergence Creeps Along
Intelligize Blog
by Adria Hunter
2w ago
Though the world may be coming together on unified climate disclosure standards for corporations, sparring over the Securities and Exchange Commission’s new reporting rules demonstrates that it’s happening at a glacially slow pace. After an arduous codification process, the climate disclosure rules adopted by the SEC this month included many of the basic points that had been under discussion for years. Among them, publicly traded companies must disclose: Climate-related risks that have had or are reasonably likely to have a material impact on the company’s business strategy. Results of operat ..read more
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Three Lessons from Early Disclosures of Cybersecurity Incidents
Intelligize Blog
by Adria Hunter
3w ago
Many health care providers have gone through a rough stretch in recent weeks following a cyberattack on a unit of UnitedHealth Group. According to the New York Times, “hundreds, if not thousands,” of care providers couldn’t get insurance approval for run-of-the-mill medical services like drug prescriptions when hackers shut down parts of Change Healthcare’s electronic system. The gang believed to have orchestrated the attack, ALPHV, apparently scored a $22 million ransomware payment as a result. This seems like a perfect test case for the Securities and Exchange Commission’s new cybersecurity ..read more
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Inadequate Internal Controls Contribute to Surge of Delayed Annual Reports
Intelligize Blog
by Adria Hunter
3w ago
A slew of companies both large and small have announced in recent weeks that they would miss the deadline this year for filing their annual reports. Although companies delaying the release of their Form 10-K isn’t unusual, the number doing so this year is. According to Intelligize data, 71 companies have announced delays in releasing their annual reports this year, compared with 42 last year, marking an increase of roughly 40%. Well-publicized lapses in internal controls over financial reporting have contributed to some of the delays, and large companies are certainly not immune to the deficie ..read more
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Warning Signs Emerge Around Corporate Debt
Intelligize Blog
by Adria Hunter
1M ago
It was a hotspot for GOP tastemakers during Donald Trump’s time in the White House, but since the former president left Washington, you don’t hear much about what was once Trump International Hotel. The Trump family sold the hotel’s lease rights in 2022 for the premium price of $375 million in a deal that has turned into a boondoggle for its current owner, CGI Merchant Group. The Wall Street Journal reports that CGI has defaulted on a $285 million loan tied to the property, which it rebranded as a Waldorf Astoria. Perhaps a luxury hotel located in the former Old Post Office building doesn’t ap ..read more
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Top Four Artificial Intelligence Risks on SEC’s Radar
Intelligize Blog
by Adria Hunter
1M ago
Likely confounding an audience at Yale Law School accustomed to rote legal speeches, Securities and Exchange Commission Chair Gary Gensler in recent remarks on artificial intelligence offered riffs on Valentine’s Day, robots and his affinity for romantic comedies. “The streaming apps long ago figured out I’m a rom-com guy,” quipped the now-noted cinephile. Amid the levity – and a surprising mention of the 2022 hit horror film M3GAN – Gensler got down to business on regulatory and policy issues involving AI, stressing the importance of balancing the potential benefits of the burgeoning technolo ..read more
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U.S. Companies Sour on Operating in China
Intelligize Blog
by Adria Hunter
1M ago
Doing business in China has long been a delicate proposition for U.S. companies. As geopolitical tensions continue to mount, it appears those once willing to deal with the risks aren’t reaping big enough rewards. The hostilities between China and the United States have grown to the point that companies have started to scale back what were once big bets on the world’s most populous nation. A survey last year conducted by the U.S.-China Business Council indicated that U.S. companies are dealing with more “uncertainty, lost sales and rising costs” as a result of the icy relationship between the g ..read more
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