My views on these subjects owe much to my collaborators, especially Michael Barr, Megan Shearer, and Michael Wellman, with whom I have been studying the behavior of algorithmic traders in financial markets, and Howell Jackson, with whom I have been presenting on social media and capital markets at PIFS-IOSCO’s trainings for securities regulators. All errors are my own. Thanks to the participants at the University of Chicago’s Symposium on “How AI Will Change the Law” for helpful comments, and to the editors of the University of Chicago Law Review for their helpful insights.
This essay argues that the increasing prevalence and sophistication of artificial intelligence (AI) will push securities regulation toward a more systems-oriented approach. This approach will replace securities law’s emphasis, in areas like manipulation, on forms of enforcement targeted at specific individuals and accompanied by punitive sanctions with a greater focus on ex ante rules designed to shape an ecology of actors and information.
