SEC Investigating Whether OpenAI CEO Sam Altman Misled Investors, Internal Communications Under Scrutiny: Report

The Securities and Exchange Commission (SEC) is currently investigating the possibility of misleading communications by OpenAI‘s CEO, Sam Altman, which could have impacted the company’s investors.

What Happened: The SEC is examining internal communications by Altman as part of an investigation into whether OpenAI’s investors were misled, reported The Wall Street Journal, citing people familiar with the matter.

This investigation, which has not been previously disclosed, began after the OpenAI board ousted Altman in November, citing a lack of transparency in his communications.

The SEC’s New York-based officials are leading the investigation and have requested senior OpenAI officials to preserve internal documents. The probe is ongoing, and the SEC has not yet identified any specific misleading statements or communications by Altman.

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This investigation is just one of the many legal and governmental challenges faced by OpenAI. The company is also under scrutiny for its business practices and its relationship with Microsoft, which has a commercial partnership with OpenAI.

The SEC upholds laws prohibiting individuals from misleading investors, irrespective of whether fundraising occurs in public or private markets. According to the report, the SEC frequently concludes investigations without levying formal allegations of misconduct.

OpenAI did not immediately respond to Benzinga's request for comment.

Why It Matters: The investigation into Altman’s communications comes after a tumultuous period for OpenAI. Altman was abruptly dismissed as CEO in November, with the board accusing him of inconsistent candor in his communications. This led to a dramatic shift in leadership at OpenAI, with Altman being reinstated as CEO after a few days.

OpenAI’s interim CEO, Emmett Shear, denied that Altman was fired over AI safety concerns, adding another layer of complexity to the situation. The ongoing SEC investigation adds to the challenges that OpenAI is currently navigating, further highlighting the company’s turbulent recent history.

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