Good afternoon and welcome to the first Investor Advisory Committee meeting of 2025. I wish I could be there with you, but I am pleased to be joining you virtually. I look forward to meeting all of you in person in the future.
I expect that this year will be a busy and exciting one for the Commission, and the contributions of this Committee will be part of that activity. Earlier this year, the Commission made a call for candidates to fill vacancies on the Committee. The deadline for candidates to apply is March 15, and the Commission has already received a large number of submissions. The substantial interest in joining the Committee demonstrates the importance of the work that all of you are doing, and I thank you for your commitment to public service.
At today’s meeting, the Committee will be discussing retail investor fraud. Responsible regulation can contribute to an environment of trust and transparency in which companies can flourish and investors can invest with confidence. Unfortunately, however, there will always be bad actors who seek to take advantage of that trust, and these fraudsters are using increasingly sophisticated techniques to steal wealth from American investors. This can decrease investor confidence and impair capital formation. We will continue to educate investors, in particular more vulnerable investors, of these scams. The Commission’s Division of Enforcement continues its work to expose securities fraud, recover stolen funds whenever possible, and punish wrongdoers.
Today the Committee will also be discussing the growing impact of artificial intelligence on the securities markets. The speed of development and innovation in the AI space has been remarkable. However, along with the promise of AI comes potential risks that should be understood. I thank the Committee for giving time to this important topic, and look forward to its recommendations. The Commission’s Division of Economic and Risk Analysis and Division of Examination will be hosting a roundtable on AI later this month on March 27 to explore these issues further. For those who plan to attend that event – although it is not required – a request to please register in advance, because I understand it we are expecting the roundtable to be well-attended.
Finally, the Committee will be discussing a proposed recommendation regarding the traceability of shares in connection with Section 11 prospectus liability claims under the Securities Act of 1933 (“Securities Act”). This recommendation follows the Committee’s discussion of these issues at their meeting last September. The Supreme Court has held that an investor plaintiff who is seeking a remedy under Section 11 of the Securities Act must prove that the shares that they hold are traceable to a registration statement.[1] The issue of traceability is a complicated one, and I look forward to the Committee’s thoughts on this issue.
Thank you to the Committee members and panelists for your time in preparing for this meeting. I would also like to thank our Investor Advocate Cristina Martin Firvida and her staff for their hard work in organizing today’s meeting. I look forward to seeing a read-out of the discussions that follow.
[1] Slack Technologies, LLC v. Pirani, 598 U.S. 759, 770 (2023)
