The U.S. Department of Justice is investigating whether a hedge funds firm used by Goldman Sachs misled investors about its financial services offerings, the Securities and Exchange Commission said Friday.
The Justice Department said it’s looking into whether a New York-based financial services firm, Insured Capital, misled investors in a 2015 IPO of a financial services technology company.
The probe focuses on whether Insured made false statements about the services it offered to customers.
Insured Capital has said it is cooperating with the investigation.
The company declined to comment on the allegations.
Insurance regulators are increasingly concerned about the use of technology and artificial intelligence to predict market movements and offer financial advice, a field that includes artificial intelligence, human decision-making, and other technology.
In July, regulators issued guidance on the potential use of artificial intelligence in the financial services industry, warning that such technologies could “interfere with the accuracy of market participants’ financial forecasts.”