House Democrats seek SEC answers on AI investment advisors
Democratic House lawmakers are pressing the SEC to explain how it is regulating AI-powered trading and investment advice for retail investors. In a letter led by Bill Foster and Brad Sherman, they warned that “agentic” trading tools raise major concerns about investor protection, broker responsibility, market integrity, and liability for AI developers. They said these tools are already making consequential investment decisions while largely operating outside the securities regulatory framework, and could soon expand from stocks into options, crypto, event contracts, and futures. The lawmakers also pointed to platform disclaimers saying firms cannot guarantee AI output accuracy or suitability, which they argue creates legal uncertainty. They asked the SEC whether it has guardrails, when AI agents must register, how it is consulting with platforms, and whether new congressional authority is needed.
