Where automated decisions went wrong

BC Tribunal Confirms Companies Remain Liable for AI Chatbot-Created Information - Lexology

The AI chatbot provided inaccurate information to a user.

1 source article · read the reporting →

Two families file lawsuit against AI chatbot service - CBS News

The chatbot provided responses to children

Company involved

character.ai

AI system involved

character.ai

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SEC charges American Bitcoin Academy over $1.2M AI scam

Brian Sewell, through his company American Bitcoin Academy, allegedly defrauded 15 students of $1.2 million by claiming his Rockwell Fund would use AI to generate high returns. The SEC charged that Sewell never launched the fund and lost the investors' money when his Bitcoin wallet was hacked. The case was settled with Sewell agreeing to pay $1.6 million in disgorgement and a $233,229 penalty.

Company involved

American Bitcoin Academy

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EvenUp AI errors in personal injury demand letters lead to scrutiny

EvenUp, a legal tech startup valued at $1 billion, uses AI to draft personal injury demand letters. Former employees revealed that the AI system frequently makes errors, including missing injuries and fabricating medical conditions. The company defends its hybrid approach with human oversight, but critics allege overpromised AI capabilities.

Company involved

EvenUp

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Anthropic ordered to respond over alleged AI-hallucinated citation in court filing

A US federal magistrate judge has ordered Anthropic to respond to music publishers' claim that a court filing by Anthropic data scientist Olivia Chen cited a fictitious academic article that may have been generated by Anthropic's AI tool Claude. The publishers' lawyer said he had confirmed with the named author and journal that the article did not exist. Anthropic's lawyer disputed this, saying it was a mis-citation rather than an AI hallucination. The filing was made in an ongoing copyright case brought by Universal Music Group, Concord, and ABKCO against Anthropic over the use of song lyrics to train Claude.

Company involved

Anthropic

AI system involved

Claude

5 source articles · read the reporting →

AI-generated article misstates Roadzen's Q1 revenue expectations

An AI-generated article on The Motley Fool incorrectly stated that Roadzen's analyst expectations for Q1 revenue were over $21 million, implying a revenue miss of more than 50%. Roadzen clarified that these figures were never issued by its covering analysts and that its actual revenue of $10.9 million was in line with estimates. The Motley Fool later corrected the article and added an editor's note acknowledging the error.

Company involved

The Motley Fool

4 source articles · read the reporting →

Center for Investigative Reporting Sues OpenAI, Microsoft Over Copyright

The Center for Investigative Reporting, publisher of Mother Jones and Reveal, has filed a lawsuit against OpenAI and Microsoft in federal court, alleging the companies used its copyrighted articles without permission or compensation to train their AI products. The nonprofit argues that the AI-generated summaries of its stories threaten journalism and violate the Copyright Act and the Digital Millennium Copyright Act. The case is pending in the U.S. District Court for the Southern District of New York.

Company involved

OpenAI and Microsoft

6 source articles · read the reporting →

CBSE OnMark portal vulnerability exposed student data to Google Gemini

A 19-year-old ethical hacker, Nisarga Adhikary, claimed to have hacked the CBSE's digital evaluation ecosystem, revealing that personal information of students was processed by Google's Gemini in automation scripts. The Central Board of Secondary Education (CBSE) stated on May 31, 2026, that the identified vulnerabilities had been contained and other exploitable weaknesses were being ruled out. The board expressed gratitude to alert citizens and ethical hackers who pointed out the weaknesses. No actual data breach was confirmed, but the incident raised concerns about student privacy.

Company involved

Central Board of Secondary Education (CBSE)

AI system involved

OnMark

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Thomson Reuters wins copyright lawsuit against AI startup Ross Intelligence

In 2020, Thomson Reuters filed a copyright lawsuit against legal AI startup Ross Intelligence, alleging that Ross reproduced materials from its Westlaw legal research service. In February 2025, a US District Court judge ruled in Thomson Reuters' favor, finding that Ross infringed copyright and that fair use did not apply. Ross Intelligence had shut down in 2021 due to litigation costs.

Company involved

Ross Intelligence

AI system involved

Ross Intelligence

4 source articles · read the reporting →

Publishers sue AI startup Cohere over alleged copyright infringement

A consortium of 14 publishers including Condé Nast, The Atlantic, and Forbes filed a lawsuit against Cohere, alleging that the generative AI startup engaged in massive, systematic copyright infringement by using at least 4,000 copyrighted works to train its AI models and display large portions of articles, harming referral traffic. Cohere denied the allegations, calling the lawsuit misguided and frivolous.

Company involved

Cohere

AI system involved

Cohere's AI models

8 source articles · read the reporting →

42,900 OpenClaw AI agents exposed, 15,200 vulnerable to RCE

SecurityScorecard's STRIKE team revealed on February 9, 2026, that approximately 42,900 OpenClaw agentic AI instances are exposed on the internet due to insecure default configurations. Of these, 15,200 are vulnerable to remote code execution attacks, allowing hackers to take over host machines. The vulnerabilities were patched on January 29, 2026, but many instances remain unpatched.

AI system involved

OpenClaw

5 source articles · read the reporting →

NHTSA investigation PE24016: Unexpected ADS behavior

Waymo's automated driving system exhibited unexpected behavior during driving.

Company involved

Waymo

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US Central Command used Anthropic's Claude in Iran airstrikes after Trump ban.

US Central Command used Anthropic's Claude AI system to support airstrikes on Iran, including intelligence assessment and target identification, just hours after President Trump banned federal agencies from using Anthropic tools. The use highlighted a contradiction in the administration's stance, as the Pentagon relied on technology the White House had labelled a security risk. Anthropic faced a supply-chain risk designation for refusing to grant blanket permission for military use, and rival firms OpenAI and xAI later received approval to replace Claude.

Company involved

US Central Command (Centcom)

AI system involved

Claude

4 source articles · read the reporting →

TransUnion AI tenant screening denied 75-year-old man apartment due to mistaken littering conviction

Chris Robinson, then 75, applied for a senior living apartment in California. The property manager used an AI screening program from TransUnion, which assigned him a low score based on a mistaken conviction for littering that belonged to a different person with the same name in Texas. Robinson lost the apartment and his application fee. A federal class-action lawsuit against TransUnion moved toward a $11.5 million settlement in 2023.

10 source articles · read the reporting →

Didi fined for over-collecting personal data of users

The Cyberspace Administration of China fined Didi Global Inc. for violating data protection laws. The investigation found that Didi had over-collected personal data from passengers and drivers, including facial recognition, location, and clipboard information, totaling billions of records. The violations began in 2015 and continued until the investigation in 2021. Didi was ordered to pay a penalty and correct its practices.

Company involved

滴滴全球股份有限公司 (Didi Global Inc.)

AI system involved

Didi ride-hailing apps

8 source articles · read the reporting →

SEC charges YouPlus and CEO with defrauding investors

The SEC charged machine-learning startup YouPlus and its CEO Shaukat Shamim with defrauding investors. Shamim allegedly made false statements about the company's revenue and customer numbers, including providing falsified bank statements. The scheme unravelled when Shamim confessed to investors that the company had earned less than $500,000 and had only four paying customers since 2013. The SEC is seeking permanent injunctions, civil penalties, and an officer-and-director bar.

Company involved

YouPlus

AI system involved

YouPlus machine-learning tool

1 source article · read the reporting →

iTutorGroup to Pay $365,000 to Settle EEOC Discriminatory Hiring Suit

The system automatically rejected tutor applicants aged 55+ (women) or 60+ (men).

Company involved

iTutorGroup

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Clearview AI settles with ACLU over facial recognition database sales

Clearview AI has agreed to stop selling its facial recognition database to most private US companies as part of a proposed settlement with the ACLU. The company scraped billions of images from social media without consent to build its database, violating Illinois' Biometric Information Privacy Act. The settlement requires Clearview to delete old facial vectors and allow Illinois residents to opt out. The company can still sell its technology to law enforcement and government agencies.

Company involved

Clearview AI

AI system involved

Clearview AI facial recognition database

8 source articles · read the reporting →

Zillow faces securities class action over Zillow Offers wind-down

Zillow Group, Inc. is accused of making false and misleading statements to investors about its Zillow Offers home-flipping business. The company allegedly failed to disclose that its forecasting algorithm was unable to predict home prices accurately, leading to a $304 million inventory write-down and a decision to wind down the business. Investors who bought shares between February 10 and November 2, 2021, suffered losses when the stock price dropped after the announcement. A class action lawsuit has been filed in Washington federal court.

Company involved

Zillow Group, Inc.

AI system involved

Zillow Offers

10 source articles · read the reporting →

Moonwell loses $1.78M after AI-generated code from Claude Opus 4.6 causes oracle pricing error

DeFi lending protocol Moonwell lost $1.78 million after an oracle pricing error in smart contract code partially written by Anthropic's Claude Opus 4.6 model. The error valued cbETH at approximately $1.12 per token instead of its actual market price of nearly $2,200, triggering instant liquidations. Moonwell contained the issue by reducing the cbETH borrow cap, but users suffered catastrophic losses. The incident has sparked debate about the risks of AI-generated code in smart contracts.

Company involved

Moonwell

AI system involved

Claude Opus 4.6

4 source articles · read the reporting →

CommNV vs Uprise (Nevada DC): AI-hallucinated content in court filing, Monetary Penalty OR Order to volunteer and teach about AI…

The AI system generated fabricated legal citations that were included in a court filing, misleading the court and opposing counsel.

Company involved

Christopher Day

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NHTSA investigation PE24015: Rear-end Collisions Involving Zoox Vehicles

Automated driving system controlled vehicle braking and acceleration, leading to rear-end collisions with other road users

Company involved

Zoox

AI system involved

Zoox vehicle

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Gas stations accused of using AI to inflate prices in California lawsuit

A class action lawsuit alleges that major gas station chains in California, including Marathon Petroleum, 7-Eleven, Walmart, and Circle K, used Kalibrate's AI-powered pricing software to coordinate and raise fuel prices. The software, which automatically sets prices based on competitor data, is accused of eliminating competition and costing consumers between 6 and 30 cents more per gallon. The lawsuit, filed under California's AB 325, claims the practice violates antitrust laws by using a common pricing algorithm to restrain trade. The case is pending.

Company involved

Marathon Petroleum, 7-Eleven, Walmart, Circle K

AI system involved

Kalibrate Fuel Pricing

10 source articles · read the reporting →

Engineer.ai accused of exaggerating AI capabilities and using human engineers

Engineer.ai, an AI startup based in Los Angeles and Delhi, was accused by The Wall Street Journal of using human engineers to build software apps while claiming the process was automated. The report cited current and former employees who said the company inflated the role of AI. Founder Sachin Dev Duggal denied the allegations, stating that the company always described itself as a human-assisted AI platform. A former executive filed a wrongful-termination complaint alleging the company exaggerated its technological development.

Company involved

Engineer.ai

6 source articles · read the reporting →