Galvin Probes AI Practices at JPMorgan, Morgan Stanley

Secretary of State William Galvin, Massachusetts’ top securities regulator, has launched a sweep into the use of artificial intelligence in the securities industry — sending letters to JPMorgan, Morgan Stanley, Tradier Brokerage, US Tiger Securities, E-Trade, Savvy Advisors and Hearsay Systems.

A spokesperson for Galvin’s office told ThinkAdvisor Thursday that each letter “varies slightly by entity,” but that Galvin’s office is not releasing the letters’ content at this time.

“State securities regulators have an important role to play when it comes to AI and its impact on main street investors,” Galvin said Thursday in a statement. “If deployed without the guardrails necessary to ensure proper disclosure and consideration of conflicts, I am concerned that this technology could result in harm to investors.”

The letters were sent to ”a number of registered and unregistered firms known to be using or developing the use of AI for business purposes” in the securities industry, according to his office.

The Massachusetts Securities Division “has been aware of and has been looking into AI issues for some time,” the spokesperson told ThinkAdvisor Thursday in an email. “This follows the Division’s longstanding interest in emerging technologies used by financial firms.”