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Liz shared in January (pre-Inauguration Day) what we think was the first “AI washing” case against a public company. While “AI washing” securities suits continued, it wasn’t clear whether and how this enforcement priority would shift — or continue — under the new administration. This Weil alert highlights two more recent SEC and DOJ enforcement actions that it says underscore the continued federal enforcement focus in this area.

On April 9, 2025, the U.S. Securities and Exchange Commission (SEC) and the U.S. Attorney’s Office for the Southern District of New York commenced parallel actions against Albert Saniger, the former CEO of Nate, Inc. (Nate), a privately-held technology startup, alleging that he made materially false and misleading statements to investors regarding the company’s artificial intelligence (AI) capabilities.

Then on April 22, 2025, the SEC and the U.S. Attorney’s Office for the Eastern District of Virginia announced parallel charges against Ramil Palafox, the founder of PGI Global, alleging, among other claims, that he made false statements to investors regarding the development of an AI-powered crypto auto-trading platform and other topics.

We know that enhancing “America’s global AI dominance” is a priority for this administration, and the alert says that the “accompanying statements by DOJ and SEC officials signal that the current administration may view AI washing as a threat to achieving its broader policy initiative and accordingly, intends to pursue civil and criminal charges based on alleged false and misleading statements regarding AI capabilities, which may include fundraising by public companies, private companies, and investment advisers.” It suggests that companies (and investment advisors):

– Conduct a thorough review of their disclosures and public-facing statements regarding AI capabilities (with particular attention to statements used in fundraising activities, whether in the public or private markets);

– Ensure that such disclosures and statements are accurate and consistent; and

– Ensure they can be substantiated with supporting documentation.

We’ve posted this and other related memos in our (very robust) “Artificial Intelligence” Practice Area. For more on risk management and compliance issues associated with AI and other emerging technologies, be sure to check out and subscribe to our free AI Counsel Blog.

– Meredith Ervine