SEC to Scrutinize Firms' Use of AI in 2026

Regulators warn advisors to implement AI policies and monitoring now to avoid compliance issues.

Published on Mar. 10, 2026

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Regulators, including the Securities and Exchange Commission (SEC), are increasing their focus on how financial advisory firms use artificial intelligence (AI) tools in 2026. Panelists at the Future Proof Citywide conference in Miami Beach, Florida warned that firms that delay implementing AI policies or monitoring employee AI use could face problems during regulatory examinations.

Why it matters

As AI becomes more prevalent in the financial services industry, regulators want to ensure firms are using these tools responsibly and transparently. Firms that fail to get ahead of AI regulation could face enforcement actions or other compliance issues.

The details

The SEC's 2026 Examination Priorities highlight scrutiny of how firms represent their AI capabilities, whether they have policies and procedures to monitor AI use, and how they are integrating regulatory technology. Panelists advised firms to require employees and contractors to access AI through a sanctioned portal that tracks activity, and to be accurate and transparent in reporting how AI is used within the firm and with clients.

  • The SEC's 2026 Examination Priorities were released in early 2026.

The players

Andrew Foerch

Deputy editor of Citywire and moderator of the "AI Regulation Is Coming: What Advisors Need to Prepare for Now" session.

Alec Crawford

Founder and CEO of AI risk management platform Verapath.

Thomas Stewart

Founder and CEO of compliance software firm Hadrius.

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What they’re saying

“If you're not keeping track of what people are doing, you're going to have a problem.”

— Alec Crawford, Founder and CEO of Verapath (Citywire)

“You have to be accurate and transparent in your reporting of how you're using AI in the firm, with your clients, with the market in general, so that you don't get caught misrepresenting how you're actually using it.”

— Thomas Stewart, Founder and CEO of Hadrius (Citywire)

What’s next

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The takeaway

This case highlights growing concerns in the community about repeat offenders released on bail, raising questions about bail reform, public safety on SF streets, and if any special laws to govern autonomous vehicles in residential and commercial areas.