Artificial Intelligence

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Ommid C. Farashahi
Melissa Y. Gandhi

By this point, I think all of us have seen stories about lawyers who have gotten in hot water because they relied on AI to come up with legal authority, only for the AI-generated citations turning out to be phony. In the following guest post, Ommid C. Farashahi and Melissa Y. Gandhi of the BatesCarey LLP law firm take a look at this recent phenomenon and consider the ethical and profesional implications. I would like to thank Ommid and Melissa for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is the author’s article.Continue Reading Guest Post: Courts Crack Down on AI Misuse in the Legal Profession

Artificial Intelligence (AI) tools and processes are becoming increasingly pervasive in many industry sectors and in many phases of business. AI use is also spreading to corporate processes and functions. For example, as I recently noted, some companies many be using AI tools to draft the MD&A in their periodic reports. And, at least according to a recent post in the Harvard Law School Forum on Corporate Governance by lawyers from the Debevoise law firm, some corporate boards may be “adopting AI meeting tools to assist with the drafting of board and committee minutes.” As the memo’s authors note, board adoption of AI tools for these purposes may offer some benefits, but the use of the tools also entails risk, which board members will want to take into account in using the tools.

The June 23, 2025, law firm memo, entitled “AI Can Draft Board Minutes – But Should It? Considerations for Public Companies,” can be found here.Continue Reading AI Tools in the Boardroom

Sarah Abrams

If you have been following the news out of Washington surrounding the One Big Beautiful Bill, you know that one of the features of the Bill, passed by the House of Representatives, was a provision barring states from enacting laws or regulations relating to AI for ten years. It looks like this provision will not be part of the Senate version of the bill, but the provision still raises important questions about AI regulation. In the following guest post, Sarah Abrams, Head of Claims Baleen Specialty, a division of Bowhead Specialty, takes a look at the larger context of AI regulation. I would like to thank Sarah for allowing me to publish her article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article.Continue Reading Guest Post: One Beautiful Attempt to Stop State AI Regulation

As I have noted in recent posts (most recently, for example, here), the proliferation of AI in many industries is changing the way business gets done. According to a new study, AI could also be changing the language companies use to report to regulators and to communicate with their investors, in ways that potentially could increase the companies’ securities class action litigation exposure.Continue Reading Tone Portrait: Artificial Intelligence and MD&A

In recent months, a number of companies have been hit with AI-washing securities class action lawsuits alleging that the defendant companies overstated their AI-related capabilities or opportunities (such as, for example, the securities suit filed late last week against Tempus AI, as discussed here). While there have been quite a number of AI-washing related securities suits, I have long though that the larger and longer-term AI-related securities litigation risk is not as much with respect to allegations that companies overstated their AI capabilities, as from allegations that companies understated their AI-related risks.

In a new securities class action lawsuit that reflects these latter kinds of risk, last week a plaintiff shareholder sued online platform Reddit, alleging that the company misled investors by downplaying the impact on the company’s site traffic and ad revenue from Google’s adoption of artificial intelligence search results. As discussed below, these kinds of AI-risk related allegations could represent a potential new area of AI-related securities litigation risk. A copy of the June 18, 2025, complaint against Reddit can be found here.Continue Reading Reddit Downplayed Impact of Google’s AI-Related Changes, Suit Alleges

Among the many executive orders launched at the outset of the current Trump administration was the January 23, 2025 Executive Order that declared the administration’s commitment to maintaining the U.S. at the “forefront of artificial intelligence (AI) innovation.” The Executive Order set out the administration’s commitment to removing policies and directives that “act as barriers to American AI innovation.”

The Executive Order meant a variety of things when it referred to removing barriers, and the statement does at least raise the question about what the administration’s – and in particular, the SEC’s – enforcement approach to AI will be, if the goal is to remove barriers. As discussed below, there are signs to suggest that the administration will continue to monitor and address AI-related misrepresentations, notwithstanding its commitment to removing barriers to AI innovation.  Continue Reading What About AI-Related Enforcement Under the Trump Administration?

Sarah Abrams

Workplace utilization of artificial intelligence-enhanced tools, including AI-based Large Language Models, is becoming pervasive. But could employee use of AI tools potentially lead to executive liability? That is the question addressed in this guest post, from Sarah Abrams, Head of Claims Baleen Specialty, a division of Bowhead Specialty. I would like to thank Sarah for allowing me to publish her article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article.Continue Reading Guest Post: Does Employee Use of AI at Work Create Executive Risk?

The recent meteoric rise of Artificial Intelligence (AI) has not only upended many traditional business processes and set financial markets ablaze, but it has also captured the attention of the world’s political leadership. The leaders’ response includes not only excitement about AI’s impressive potential, but also concerns about the legitimate risks that AI presents. At the recent Artificial Intelligence Action Summit, held in Paris on February 10 and 11, 2025, many event participants advanced the view that for AI to realize its full potential, a regulatory “light touch” is required. While this restrained regulatory perspective has many advocates, the concerns associated with AI will still have to be addressed one way or another – which underscores the question about what the appropriate approach to AI regulation should be.Continue Reading AI-Related Risk and Regulation

Earlier this week, a plaintiff shareholder filed a securities class action lawsuit against ad-buying platform The Trade Desk after the company announced revenues lower than anticipated due to delays in the rollout of the company’s AI-based forecasting tool. As discussed below, this new lawsuit arguably represents a potential new direction in AI-related securities lawsuits. A copy of the February 19, 2025, lawsuit can be found here.Continue Reading Ad Platform Hit with Securities Suit for Alleged Failure to Disclose AI Risk

The global economy is still adapting to the advent of the Artificial Intelligence (AI) era. It remains unclear what AI ultimately will mean for economies and businesses, and many businesses are struggling to adjust in real time. The firms experiencing these struggles also include companies in the business of providing AI products and services. In many cases, these companies’ struggles can translate into securities litigation. A lawsuit filed earlier this week against Netherland-domiciled AI services company Elastic illustrates the ways securities litigation can arise from AI companies’ business struggles. A copy of the February 11, 2025, complaint filed against Elastic can be found here.Continue Reading AI Search Company Hit with Securities Suit