Skadden's Dan Michael on SEC's AI Stance

INTERVIEW On Regulating Increasingly AI-driven markets

As AI reshapes financial services, regulators are grappling with how to oversee the transformative technology. The U.S. Securities and Exchange Commission is tasked with balancing innovation and investor protection in an increasingly AI-driven market.

To understand the SEC's approach, I spoke with Dan Michael, a partner at Skadden in New York City and former head of the complex financial instruments group in the SEC's enforcement division.

While the agency has initially focused on clear-cut cases of misrepresentation, more sophisticated enforcement actions are likely on the horizon. Michael draws parallels between the SEC's AI approach to its stance on cryptocurrency.

The discussion delves into:

• The current status of proposed rules, like predictive analytics 

• The challenges of using AI while complying with existing regulations like Regulation Best Interest

• The complexities of proving intent in AI-driven trading

• The regulatory implications…