The Securities and Exchange Commission has reportedly subpoenaed several major Wall Street lenders, including Goldman Sachs, JP Morgan, Citigroup and Bank of America, to gather information about their role in the near-collapse of AI-focused hedge fund Situational Awareness. The fund, led by former OpenAI researcher Leopold Aschenbrenner, saw its assets plunge from approximately $45 billion to $10 billion in late July following heavy losses during the tech sector sell-off. The fund, reported to have used leverage of up to 400%, was forced to unwind much of its concentrated and levered portfolio, which included stakes in SK Hynix and CoreWeave. Ken Griffin’s multi-strategy giant Citadel stepped in to buy these positions at roughly a 10% discount and subsequently offloaded about 80% of the associated risk. The regulatory inquiry does not imply any allegations of wrongdoing and may conclude without enforcement action.
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