Daniel Forman Discusses AI in SEC Disclosures with Law360

Capital markets partner Daniel Forman was quoted in a Law360 article about the rising number of references to artificial intelligence in securities filings, saying that companies should be mindful of how they approach AI in their business and risk disclosures.

"If the CEO is out on the street talking about [AI], it should make its way into the company's SEC disclosures in an appropriate way, both through business disclosures and risk factor disclosures," Daniel told Law360. "And we should all be mindful of 'AI-washing' — that's important from the SEC's perspective." 

SEC Chair Gary Gensler recently spoke out against "AI-washing" — the exaggeration or misconstruction of AI claims — as public companies across sectors increasingly mention AI in their filings.

"Everyone is talking about AI, all the way from manufacturing companies to consumer retail companies that make products that are sold in supermarkets," Daniel said. "A lot of our life sciences clients are dealing with the use of AI in drug discovery."

To manage risk, companies should be aware of their third-party vendors’ use of AI as well as internal use of AI for decisions like hiring, Daniel said. Executives should also consider setting up policy teams to evaluate and monitor AI and share findings with the board of directors.

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