Akerman Corporate Practice Group Partner Tara Jackson, Co-Chair Christina Russo, and Associate Arielle Flamenbaum contributed "AI Governance Tips For Avoiding Securities Suits" to Law360, offering public companies a practical framework for managing AI-related disclosure and governance risks as regulatory scrutiny in this area continues to intensify.
Tara, Christina, and Arielle explain that for public companies, AI has evolved well beyond a technology question into a disclosure and governance challenge that permeates securities filings, earnings calls, and investor presentations. While the SEC has not adopted AI-specific disclosure rules, existing materiality and anti-fraud principles apply with full force. The authors identify AI washing, a concept in which companies overstate or mischaracterize AI capabilities, which has already been a subject of enforcement actions, and AI hushing, in which companies underemphasize or omit AI-related risks. Both carry meaningful legal exposure, as the SEC's ongoing enforcement activity and the securities class action filed against Upstart Holdings Inc. in April 2026 make clear.
Against that backdrop, Tara, Christina, and Arielle counsel public companies to keep external AI messaging clear, credible, and grounded in actual practice. They also highlight a striking governance gap: only about 8% of U.S. public companies analyzed in a recent report currently disclose board oversight of AI, even as investor expectations continue to move in the opposite direction — making governance alignment not just a best practice, but an emerging imperative.