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SEC Charges Rimar Capital, Owner Liptz, and Boro in 'AI Washing' Fraud

Oct 10, 2024, 08:40 PM

The U.S. Securities and Exchange Commission (SEC) has charged Rimar Capital USA Inc., Rimar Capital LLC, their owner Itai Liptz, and associate Clifford Boro with defrauding investors by making false and misleading statements about the firm's purported use of artificial intelligence (AI) for automated trading, a practice known as "AI washing." According to the SEC, the defendants misled investors by claiming to utilize AI technology to perform automated trading for client accounts, when in fact they did not. The SEC alleges that the defendants used AI "buzzwords" to deceive investors and engaged in numerous other material misrepresentations.