Headline: Sullivan & Cromwell blames “AI hallucinations” for ~40 bogus citations in court filing — a warning for crypto-era litigation
Sullivan & Cromwell, one of the largest U.S. law firms and a participant in high-profile crypto matters (it has represented FTX in bankruptcy proceedings), has apologized to a federal judge after one of its court filings contained roughly 40 incorrect citations and other errors that the firm attributes to AI-generated content.
What happened
- Andrew Dietderich, co-head of Sullivan & Cromwell’s global restructuring team, wrote to Chief Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York to disclose the problems. The flawed filing was part of an emergency motion submitted nine days earlier.
- Dietderich told the court the firm accepts responsibility, acknowledged its duty to ensure accuracy, and explicitly apologized: “We deeply regret that this has occurred.” He added that he personally takes responsibility for the failure tied to the filing.
Cause and internal controls
- Sullivan & Cromwell said the errors were caused by “AI hallucinations” — fabricated or erroneous content produced by AI tools — and by manual mistakes that slipped through review.
- The firm already has internal rules on AI use, including a requirement to check citations before court submissions. Dietderich said those procedures were not followed in this case and the review process failed to catch the false citations and other mistakes.
- The firm has opened an internal investigation, has taken immediate remedial steps, and is reviewing whether additional training or stronger checks are needed.
How the error surfaced
- Rival firm Boies Schiller Flexner LLP alerted Sullivan & Cromwell to the problems; Dietderich said he contacted that firm directly to thank them and apologize.
Wider pattern and why crypto lawyers should care
- The incident joins a growing tally of AI-related errors in legal filings. Legal technologist Damien Charlotin’s database records 1,334 incidents worldwide, more than 900 of them in the U.S., with many involving made-up citations and even AI-generated legal arguments.
- For the crypto sector — where bankruptcy and litigation records (e.g., FTX-related proceedings) can shape market outcomes and enforcement actions — mistaken or fabricated citations can distort the record, create delays, and undermine trust in filings. The episode underscores the high stakes of combining AI drafting tools with legal work unless strict verification is enforced.
Bottom line
Sullivan & Cromwell’s misstep is a reminder that AI tools can speed drafting but also introduce hallucinations that carry real legal and reputational risk. The firm says it is investigating and bolstering safeguards; the broader legal community — especially teams handling fast-moving crypto disputes — will be watching how law firms adapt review processes to prevent similar errors.
Read more AI-generated news on: undefined/news
