Litigation & Enforcement Attorneys Analyze FINRA’s Focus on GenAI in New York Law Journal

In an article published in New York Law Journal, litigation & enforcement partners Lisa H. Bebchick and Amy Jane Longo, managing principal and global head of Advanced E‑Discovery and AI Strategy Shannon Capone Kirk, associate Anne Conroy, and associate Adam Garfinkel analyze FINRA’s 2026 Annual Regulatory Oversight Report and its heightened focus on generative AI.

The authors note that the presence of GenAI in many different areas of the Report highlights FINRA’s signaling that there is a need to ensure that GenAI is not considered in a vacuum, meaning that firms should consider how GenAI more broadly may impact traditional areas of focus, such as cybersecurity, anti-money laundering, and third party vendor management. While recognizing the efficiencies achieved through the use of GenAI, the article underscores FINRA’s focus on the need still to keep a “human‑in‑the‑loop” to provide oversight where firms are implementing governance protocols around GenAI adoption and implementation and ultimately utilizing GenAI tools.

The article also discusses FINRA’s focus on threat actors increasingly using GenAI to perpetrate frauds against firms and their clients and the importance remaining vigilant and knowledgeable about potential threats, including by sharing threat intelligence with other industry participants.