SEC Subpoenas Wall Street Banks Over AI Hedge Fund Situational Awareness Collapse
The U.S. SEC has subpoenaed Goldman Sachs, JPMorgan, Citigroup, and Bank of America over the near-collapse of AI-focused hedge fund Situational Awareness. Founded by former OpenAI researcher Leopold Aschenbrenner, the fund lost about $35 billion in late July 2026 after margin calls forced it to unwind heavily leveraged positions (up to 400%) in AI stocks. Citadel purchased the portfolio at a discount. The investigation examines trade timing and lender communications; no wrongdoing has been alleged.
Editorial responsibility
- No named human review is recorded for this page.
- Reports are grouped by semantic similarity and deterministic rules. Language models may assist titles, summaries, translation and cross-source analysis; the page itself is projected from evidence records.
- Current automated evidence projection
Cross-source coverage
Wire timeline
US investigates trades made by 'golden child' of AI's hedge fund
The US Securities and Exchange Commission (SEC) has launched an investigation into the near collapse of Situational Awareness, an AI-focused hedge fund founded by 24-year-old Leopold Aschenbrenner, a former OpenAI employee. The fund, which had made a 439% profit by June 2026 through leveraged bets on AI stocks like SK Hynix and Anthropic, suffered a 67% decline after a sharp correction in semiconductor stocks. Subpoenas were sent to major Wall Street banks including Goldman Sachs, JPMorgan, Citigroup, and Bank of America to examine the timing of trades and communications about leverage. The fund was forced to sell most of its portfolio to Citadel. Aschenbrenner, dubbed the 'Nostradamus of AI,' has not been accused of wrongdoing, and the fund says it will cooperate fully with regulators.
SEC Subpoenas Banks Over Situational Awareness Hedge Fund Collapse
The U.S. Securities and Exchange Commission has issued subpoenas to major Wall Street banks including Goldman Sachs, JPMorgan Chase, Citigroup, and Bank of America, seeking information about their dealings with Situational Awareness, an AI-focused hedge fund that nearly collapsed in late July 2026. The subpoenas request details on when the fund executed trades and how it communicated with lenders about its use of borrowed capital. Banks were instructed to retain all records concerning the fund. Situational Awareness, founded by former OpenAI researcher Leopold Aschenbrenner, commanded roughly $45 billion at its peak using up to 400% leverage before losing approximately $35 billion after margin calls forced a distressed sale. The fund's portfolio was heavily concentrated in AI infrastructure names like Sandisk and Micron Technology, which suffered steep declines. Ken Griffin's Citadel purchased the portfolio at a discount and has since unwound most of the risk. The fund has not been accused of wrongdoing, and the investigation is in early stages.
SEC subpoenas banks over Situational Awareness hedge fund collapse
The U.S. Securities and Exchange Commission has issued subpoenas to major Wall Street banks including Goldman Sachs, JPMorgan Chase, Citigroup, and Bank of America seeking information about their dealings with Situational Awareness, an AI-focused hedge fund that nearly collapsed in late July 2026. The subpoenas request details on when the fund executed trades and how it communicated with lenders about its use of borrowed capital. Regulators also instructed banks to retain all records concerning the fund. Situational Awareness, founded two years ago by former OpenAI researcher Leopold Aschenbrenner, had commanded roughly $45 billion at its July peak using up to 400% leverage before losing approximately $35 billion in assets after margin calls forced a distressed sale. Ken Griffin's Citadel purchased the fund's publicly traded portfolio at a discount and has since unwound over 80% of the risk. The fund has not been accused of wrongdoing, and the investigation is in its earliest stages.
Show 2 older updatesHide older updates
SEC subpoenas Wall Street banks over AI hedge fund Situational Awareness's near collapse
The U.S. Securities and Exchange Commission has subpoenaed several major Wall Street banks, including Goldman Sachs, JPMorgan, Citigroup, and Bank of America, seeking information about their role in the near-collapse of AI-focused hedge fund Situational Awareness. The fund, led by former OpenAI researcher Leopold Aschenbrenner, plunged from about $45 billion to around $10 billion in late July 2026 after a rapid tech sell-off forced it to unwind heavily leveraged positions in stocks like SK Hynix and CoreWeave. The SEC is investigating the fund's trades, use of leverage (reportedly up to 400%), and communications with lenders. Citadel, led by Ken Griffin, stepped in to buy the positions at a discount and has since offloaded about 80% of the risk. The subpoenas do not imply wrongdoing, and the fund has stated it will cooperate fully with regulators.
SEC Subpoenas Wall Street Banks Over Hedge Fund Situational Awareness
The U.S. Securities and Exchange Commission has issued subpoenas to major Wall Street banks regarding the hedge fund Situational Awareness, according to sources familiar with the matter. The subpoenas seek information related to the fund's trading activity after it came under pressure and was forced to exit many positions last month during an AI stock rout. The fund faced margin calls and began liquidating equity positions, with Ken Griffin's Citadel stepping in to buy the bulk of its public stock bets. Situational Awareness stated it is a highly-regulated business and will cooperate fully with any regulatory request. An SEC inquiry does not necessarily indicate a firm is under investigation, and probes can end without enforcement action.