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SEC subpoenas banks over Situational Awareness AI fund collapse
The U.S. Securities and Exchange Commission (SEC) has issued subpoenas to major Wall Street banks, including Goldman Sachs, JPMorgan Chase, Citigroup, and Bank of America, following the near-collapse of the AI-focused hedge fund Situational Awareness.
The inquiry seeks information regarding the fund’s trading activity, the timing of trades that triggered margin calls, and communications between the fund and its lenders concerning the extent of its leverage. The subpoenas also include instructions for banks to preserve all relevant records.
Situational Awareness, led by former OpenAI researcher Leopold Aschenbrenner, experienced a significant drawdown in July 2026, losing approximately 67% of its portfolio value. The decline was driven by a downturn in AI-related stocks and a rise in technology companies the fund had bet against. During the unwind, the fund sold the bulk of its public equity positions to Citadel.
While the SEC is examining borrowing practices and leverage used to intensify investments in firms like Micron and SanDisk, the agency has not accused Situational Awareness or its leadership of any wrongdoing. The fund stated it expects such scrutiny for high-profile entities and intends to cooperate fully with regulators.
Entities
Citadel · Goldman Sachs · JPMorgan Chase · Leopold Aschenbrenner · Securities and Exchange Commission · Situational Awareness
Claims
What the coverage asserts, and how many sources carry each claim.
- [● 2 SOURCES] Situational Awareness managed more than $30 billion at its peak and utilized tens of billions in borrowed funds. cryptobriefing.com
- [● 7 SOURCES] The SEC is seeking trade timing data and communications between banks and the fund regarding borrowed money. cryptobriefing.com · fortune.com · hedgeco.net · bitcoinethereumnews.com · www.blocktempo.com · +2 more
- [● 7 SOURCES] Major counterparties to the fund included Bank of America, Citi, Goldman Sachs, and JPMorgan Chase. cryptobriefing.com · hedgeco.net · bitcoinethereumnews.com · www.blocktempo.com · www.cryptopolitan.com · +2 more
- [● 4 SOURCES] Citadel purchased the bulk of the fund's public equity positions during the unwind. cryptobriefing.com · fortune.com · hedgeco.net
- [● 8 SOURCES] Situational Awareness has not been accused of wrongdoing and will cooperate with regulatory requests. cryptobriefing.com · fortune.com · hedgeco.net · bitcoinethereumnews.com · www.blocktempo.com · +3 more
- [● 6 SOURCES] The fund lost approximately 67% of its portfolio value following a decline in AI stocks and a rise in shorted tech stocks. cryptobriefing.com · hedgeco.net · bitcoinethereumnews.com · www.blocktempo.com · www.cryptopolitan.com · +1 more
- [○ 1 SOURCE] Situational Awareness retains some private investments, including a stake in Anthropic. cryptobriefing.com