Your chatbot history may matter more than your browser history in a fraud case.
The Case: Search Warrant for ChatGPT Records
In June 2026, a federal judge in Manhattan allowed a search warrant targeting a business executive’s ChatGPT records in a securities fraud case. The executive, Richard Kim, was charged with defrauding investors in his crypto venture, Zero Edge, by allegedly gambling away $3.7 million in seed financing.
Prosecutors argued that Kim’s interactions with OpenAI’s ChatGPT—and other AI platforms—were likely to contain evidence of his alleged scheme, including how he researched the fraud, drafted misleading communications, or tried to cover his tracks.
Kim’s defense attorneys moved to quash the search warrant, arguing it was overbroad (it covered a period from October 2023 through May 2026, spanning months before the alleged crime and more than a year after his arrest) and that it would reveal privileged communications, as Kim had used ChatGPT for legal research.
The court’s ruling: Judge Lorna Schofield rejected the motion to quash, holding that the challenge was premature because the warrant had not yet been executed. The court noted that defendants can challenge the admissibility of specific evidence after the government obtains it, but there is no general right to quash warrants pre-execution.
What This Means: AI Outputs and Prompts Are Discoverable
This case shows that AI prompts and outputs are treated like any other digital evidence. If prosecutors (or civil litigants) believe that your AI conversations contain evidence of wrongdoing, they can seek them—through search warrants, subpoenas, or discovery requests.
Why this matters for boards and executives:
- Retention and logging: AI platforms may retain your prompts and outputs for months or years. Even if you think you deleted them, the platform may still have them.
- Scope of discovery: In white-collar investigations and civil fraud cases, prosecutors and plaintiffs routinely seek emails, texts, and Slack messages. Now, AI chat histories are on that list.
- No automatic privilege: As the Heppner case (covered in prior posts) made clear, AI chats are not automatically privileged. If you use AI to research or draft, those records may be discoverable.
Real-World Scenarios
This is not hypothetical. Consider:
- A CFO uses ChatGPT to draft investor communications during a financing round. If those communications are later alleged to be misleading, the AI prompts may be evidence of intent.
- An executive uses AI to research legal questions about insider trading. If the executive is later investigated, those prompts may be discoverable.
- A compliance officer uses AI to summarize internal audit findings. In a regulatory investigation, those summaries may be requested.
What Boards Should Ask
- Retention policy: Do we have a policy on how long AI platforms retain our data? Do we know what we can and cannot delete?
- Logging and audit: Do we log AI use in high-risk areas (compliance, legal, finance) so we know what was created and by whom?
- Training: Do our executives and legal teams understand that AI chats may be discoverable, and that they should use the same care they would with email or text?
- Privilege protection: If we want AI use to be covered by privilege, are we using enterprise tools with confidentiality protections, and is the use directed by counsel?
Want to discuss retention, logging, and internal AI governance? I deliver board-level courses and consult on AI legal risk and governance. Contact me.
Relevant Sources
- US Judge Allows Search Warrant Seeking Crypto Exec’s ChatGPT Records — Law.com — https://www.law.com/newyorklawjournal/2026/06/23/us-judge-allows-search-warrant-seeking-crypto-execs-chatgpt-records/
- US Judge Allows Search Warrant Targeting Executive’s AI Chatbot Communications — The Law Reporters — https://thelawreporters.com/chatgpt-attorney-client-privilege-openai-search-warrant
- United States v. Heppner, No. 1:25-cr-00503-JSR, Order (S.D.N.Y. Feb. 17, 2026) — U.S. District Court, Southern District of New York — https://jlellis.net/wp-content/uploads/2026/02/USA-v-Heppner-Order-2026-02-17-AI-Not-Privileged.pdf
- United States v. Richard Kim, No. 1:25-cr-00359-LGS — U.S. District Court, Southern District of New York
- Reuters: Judge allows US search warrant targeting executive’s AI chatbot records — Reuters (June 2026)