There has been a lot of discussion in recent years about the power of artificial intelligence, often referred to as AI, which basically is” intelligence exhibited by machines, such as computer systems, … that enables the machines to perceive their environment and use learning and intelligence to take actions that maximize their chances of achieving defined goals.”1 Generative artificial intelligence or gen AI is a type of AI that “can create new content like conversations, stories, images, videos and music.”2 While AI has already proven its ability to best humans at everything from gaming, to lip reading and disease diagnosis, there is a downside to AI, especially for investors.
Easy to use and widely available gen AI tools have allowed criminals to use AI to generate synthetic content that has the potential to deceive businesses and individuals.3 This synthetic content includes audio, images and videos that are hard to differentiate from genuine human-created content.
In January, the Financial Industry Regulatory Authority (FINRA) issued an Investor Insight bulletin on protecting investment accounts against gen AI fraud. According to the bulletin, Gen AI technology is “making it easier for bad actors to fraudulently open new accounts using investors’ identities and to improperly gain access to investors’ accounts.”4
FINRA warns that thieves use Gen AI to harm investors in a number of ways. They can take information gleaned from your social media posts to create highly personalized emails. If you click on the emails they can lead to websites with malicious links that can harm or take over your computer or smartphone.
They can also use just three seconds of audio from a loved-one’s post on social media to clone your loved one’s voice and use that to make you think your loved one is calling and is in financial or physical distress and needs access to your accounts. Thieves can also use gen AI to make credible looking identification and other documents that allow them to open accounts in your name and/or to take over existing accounts.
They can also steal selfie photos and videos which they use to impersonate you when doing business with companies now using selfies and videos in their customer-verification processes.
To protect yourself from gen AI fraud FINRA recommends using strong passwords; enabling multi-factor authentication on accounts; bypassing links and directly contacting any company that sends you a security-related message via email, phone or text and not offering these possible fraudsters any personal information via phone, email or text; use biometric verification; limit the personal details you share on social media; regularly monitor your account activity; use identify theft and credit monitoring services; report suspicious activity immediately; monitor your credit reports for accounts opened in your name; and check bank statements for transactions you don’t recognize.5
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Investors need to be aware of all types of misconduct from AI tactics to broker misconduct and financial schemes at every level. It’s important that you know your rights and ensure your protection.
Our Securities Law Firm in Royal Oak is active in fighting against broker misconduct and for investor’s rights. We have vast experience in all matters related to FINRA litigation. If you have questions about your investments or the management of your investment accounts, call our Michigan Securities Firm today.
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1 Artificial Intelligence
Link: https://en.wikipedia.org/wiki/Artificial_intelligence
2 What is Generative AI? 1/23/2025
Link: https://www.geeksforgeeks.org/what-is-generative-ai/
3 Four GEN AI Fraud Trends to Watch in 2024 by Mihail Blagoev, 1/17/2024
Link: https://www.experian.com/blogs/global-insights/four-gen-ai-fraud-trends-to-watch-in-2024/?msockid=30e9232f04b4688e1394367605d56904
4, 5 Protecting Your Investment Accounts From Gen AI Fraud, 1/15/2025
Link: https://www.finra.org/investors/insights/gen-ai-fraud-new-accounts-and-takeovers