Board member Clifford Boro will also pay a $60,000 civil penalty as part of the settlement.

The SEC's enforcement action highlights the critical need for transparency regarding technological claims, especially as AI becomes increasingly prevalent in investment services.

The SEC had previously warned about the potential misuse of AI-related terms by bad actors to deceive investors.

These actions by the SEC coincide with the signing of the world's first international treaty on artificial intelligence, aimed at addressing AI risks and promoting innovation.

The SEC has charged Rimar Capital LLC and its executives with misleading investors about their artificial intelligence capabilities, raising nearly $4 million based on false claims.

The allegations include misleading statements regarding Rimar Capital's AI capabilities, assets under management, and investment returns.

Additionally, Rimar Capital falsely reported a 46% compounded annual growth rate in client account performance since 2015.

Andrew Dean, Co-Chief of the SEC's Asset Management Unit, emphasized the agency's commitment to combating deceptive practices related to AI in investing.

The SEC's investigation revealed that Liptz and Boro misrepresented the firm's assets, claiming they were between $16 million and $20 million when the actual figure was under $2 million.

Rimar LLC has agreed to pay a total of $310,000 in civil penalties, with CEO Itai Liptz personally responsible for a $250,000 penalty and returning $213,611 in misappropriated funds.

Specifically, Rimar Capital claimed to operate an 'AI-driven' trading platform for cryptocurrencies, equities, and futures, despite having no such technology in place.

In response to the charges, Rimar Capital and its executives have consented to a cease and desist order for antifraud violations without admitting wrongdoing.