The SEC charged Albert Saniger, founder of shopping app Nate, with $42 million in securities fraud in April 2025. The charge: Nate told investors its checkout was powered by artificial intelligence. The reality was a team of contractors in the Philippines clicking the buttons.
Nate raised $50 million at a $300 million valuation. Saniger pitched investors on an AI-first automation engine. The company’s internal “automation rate” — the share of purchases completed without a human — sat near zero for most of the product’s life. Investors didn’t see the metric. They saw the demo.
A year later, AI-washing is not a one-off case. The SEC built a standing AI Task Force in August 2025 and named Valerie Szczepanik its first Chief AI Officer. Between Delphia + Global Predictions ($400K, March 2024), Joonko’s Ilit Raz (June 2024), Presto Automation (January 2025), and Saniger, the agency has now brought five AI-washing cases across two administrations. It’s bipartisan.
The operator takeaway isn’t “don’t lie” — that was always true. It’s that AI claims are now a disclosure item. Any pitch deck that says “AI-powered” needs a one-pager backing it: what model, what percentage of decisions it actually makes, what happens when it fails over to humans. Your lawyer will call it a “representation matrix.” Call it a CYA spreadsheet.
The Saniger case also killed a pattern VCs used to tolerate. “AI with humans in the loop” was a plausible story in 2022. In 2026, the SEC reads that phrase and asks what percentage is human.
— Nathan Zakhary