SEC subpoenas Goldman, JPMorgan, Citi, BofA over AI hedge fund Situational Awareness collapse

Published Aug 26, 08:44 PM UTC

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.