Three news to start your week: August 7
The SEC's Chief is worried about AI
(The New York Times)
The head of the SEC, Gary Gensler, has spent years researching the possible effects of artificial intelligence. Recent growth in generative AI tools like ChatGPT has shown that the technology is poised to revolutionize industry and society.
The next significant systemic danger to the financial system may be AI. Gensler co-authored a study on deep learning and financial stability in 2020. Based on how network and platform effects have helped tech giants in the past, it concluded that only a small number of AI companies would construct the foundational models that support the digital tools that many businesses will rely on.
According to Gensler, the US will likely wind up with two or three fundamental AI models. Due to increased "herding" behavior, which occurs when everyone relies on the same information and behaves similarly, it will deepen links across the economy and raise the likelihood of a financial crisis.
Altice suspends French executive as corruption probe widens
(Bloomberg)
According to an inside source, Altice France has suspended a member of its executive committee due to the Portuguese corruption investigation implicating some of its most influential figures.
According to the source, Tatiana Agova-Bregou, the executive director in charge of content, partnerships, and acquisitions, has been placed on leave beginning this week. She has held the position since 2019. The sources claimed that she is the first employee of Altice France to be given a leave of absence.
The suspension was disclosed at a meeting on Wednesday between management and labor representatives of Altice France, where the company's chairman, Arthur Dreyfuss, and the CEO of its subsidiary, SFR, Mathieu Cocq, discussed the Portuguese investigation and its implications for the business. According to top managers, all suspension decisions were made to safeguard the business.
SEC tells some Wall Street brokers to clean up their AML controls
(Wall Street Journal)
The US Securities and Exchange Commission stated that some Wall Street stockbrokers must take further steps to verify that their services aren't being used to launder illegal funds.
Last week, the SEC's exams division issued a risk advisory, noting that it had noticed broker-dealers who weren't devoting enough time or personnel to their anti-money-laundering initiatives. The unit also discovered that several businesses had uneven policies and practices in place that were meant to deter financial crooks. No companies were mentioned.
Banks and other financial services companies are required by US law to implement safeguards to halt the flow of illegitimate payments. For years, the SEC has monitored broker-dealers' anti-money-laundering operations, occasionally fining companies that don't follow the rules.
