The Securities and Exchange Commission on Feb. 20 announced the creation of a new unit focused on combating cyber-related misconduct and protecting retail investors from bad actors in emerging technologies like artificial intelligence.
The cyber and emerging technologies unit, or CETU replaces the crypto assets and cyber unit and comprises about 30 fraud specialists and attorneys across multiple SEC offices, according to the SEC.
It will be led by Laura D’Allaird, who most recently served as the crypto assets and cyber unit's co-chief.
“The unit will not only protect investors but will also facilitate capital formation and market efficiency by clearing the way for innovation to grow,” acting Chair Mark T. Uyeda said in a statement. “It will root out those seeking to misuse innovation to harm investors and diminish confidence in new technologies.”
The new unit will complement the work of the Crypto Task Force led by Commissioner Hester Peirce, Uyeda said.
Uyeda on Jan. 21 established the Crypto Task Force aimed at developing a comprehensive regulatory framework for cryptocurrencies.
Under former Chair Gary Gensler, the SEC in 2022 renamed its cyber unit to the crypto assets and cyber unit and bolstered its scope and workforce.
Now under new leadership, the CETU will take on a new focus.
Specifically, the SEC said the CETU will aim to combat misconduct as it relates to securities transactions in the following priority areas:
- Fraud committed using emerging technologies, such as artificial intelligence and machine learning.
- Use of social media, the dark web or false websites to perpetrate fraud.
- Hacking to obtain material nonpublic information.
- Takeovers of retail brokerage accounts.
- Fraud involving blockchain technology and crypto assets.
- Regulated entities’ compliance with cybersecurity rules and regulations.
- Public issuer fraudulent disclosure relating to cybersecurity.
