Sunday, April 14, 2024

Kennedy, Warner introduce bill to protect American investments from AI manipulation

by BIZ Magazine

WASHINGTON – Sen. John Kennedy (R-La.) joined Sen. Mark Warner (D-Va.) in introducing the Financial Artificial Intelligence Risk Reduction Act. The bill would require the Financial Stability Oversight Council (FSOC) to lead its member agencies in responding to artificial intelligence (AI) manipulation of financial markets.

“AI is moving quickly, and our laws should do the same to prevent AI manipulation from rattling our financial markets. Our bill would help ensure that AI threats do not put Americans’ investments and retirement dreams at risk,” said Kennedy.

AI has tremendous potential but also enormous disruptive power across a variety of fields and industries—perhaps none more so than our financial markets. The time to address those vulnerabilities is now,” said Warner.

The Financial Artificial Intelligence Risk Reduction Act would:

  • Mandate that FSOC coordinate financial regulators’ response to AI threats to the financial system, including “deepfakes.”
  • Require FSOC to produce a report identifying gaps in existing regulations and make specific recommendations to address those gaps.
  • Initiate FSOC proceedings to see that its member agencies implement these changes once Congress has reviewed and commented on the report.
  • Strengthen penalties when actors use AI to violate Securities and Exchange Commission (SEC) rules.
  • Modernize the “intent standard” in order to hold AI deployers accountable when their AI violates SEC rules.

Full text of the Financial Artificial Intelligence Risk Reduction Act is available here.

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