SEC seeks bank records after Situational Awareness near collapse

The Securities and Exchange Commission has subpoenaed banks that handled trading and provided leverage to Situational Awareness following the AI focused hedge fund’s near collapse last month. The subpoenas seek details on the timing of the fund’s trades and communications with lenders about its borrowing, according to people familiar with the matter. Banks were also instructed to preserve information related to the fund. Any investigation remains at an early stage and does not mean enforcement action will follow. Situational Awareness has not been accused of wrongdoing. “It is to be expected that regulators would closely examine any funds that are high profile, produce significant returns or have particularly dramatic drawdowns,” a spokesperson for the fund said, adding that it would cooperate with regulatory requests. Situational Awareness, founded two years ago by former OpenAI researcher Leopold Aschenbrenner, managed more than $30 billion at its peak and borrowed tens of billions more to amplify its positions. Its major counterparties included Bank of America, Citi, Goldman Sachs and JPMorgan Chase. The fund generated large returns through concentrated bets on artificial intell...