SEC subpoenas Wall Street banks in probe of AI hedge fund Situational Awareness

The Securities and Exchange Commission has subpoenaed several major Wall Street banks as part of an early-stage investigation into trading at Leopold Aschenbrenner’s AI-focused hedge fund, Situational Awareness, after the fund nearly collapsed last month. Regulators are seeking details on when the fund traded, how much leverage it used, and how it communicated with lenders, including banks such as Goldman Sachs, JPMorgan Chase, Citigroup and Bank of America. The inquiry follows a sharp reversal for a fund that had been riding enthusiasm for artificial intelligence and then suffered heavy losses, forced asset sales and margin calls. The case matters because it could shed light on how aggressively the fund borrowed and whether banks’ financing practices contributed to the blow-up.