Is ChatGPT Securities Fraud?
Also Hindenburg vs. Icahn, an APE amendment and the SEC vs. stock buybacks.
I suppose we will end up finding a number of answers to that question. Will some ChatGPT-style large language model manage to do some insider trading? Will it, like, ingest some corpus of data that includes inside information, and then use it to answer questions like “which stocks should I buy?” Will some big company’s corporate development department use the model to answer questions like “should we buy Company X and what price should we pay for it,” and will the developers of the model use that information nefariously? Will the model itself become sentient, get a Robinhood account and use that information nefariously? Etc.
Or I mean will someone ask ChatGPT a question like “what companies are frauds,” and ChatGPT will cheerfully and confidently say “oh Company Y is a total fraud, their revenues are super inflated,” and then people will short the stock, and then it will turn out that Company Y is fine and ChatGPT is just really good at confidently making stuff up? Is that securities fraud? By whom? (Or: Ask “what stocks are good,” ChatGPT says “Company Z is great, they have found a cure for cancer and their revenue will double,” people buy the stock, it was all made up.) Will sell-side analysts or journalists use ChatGPT to do their work, and will ChatGPT introduce market-moving factual mistakes?