SEC subpoenas Wall Street banks over Situational Awareness near-collapse

The US Securities and Exchange Commission (SEC) has issued subpoenas to several Wall Street banks associated with the AI-focused hedge fund Situational Awareness. The inquiry stems from the fund's near-collapse last month, following a sharp decline in global semiconductor stocks that put pressure on its leveraged positions, according to Reuters.

The regulatory probe focuses on the fund's trading activity and use of leverage, as well as communications between Situational Awareness and its largest lenders. Citigroup, Goldman Sachs, JPMorgan, and Bank of America are among the banks named in the subpoenas. The SEC and the banks have not commented on the matter. Situational Awareness stated that it anticipates regulatory scrutiny following a significant decline and would cooperate fully with any requests from authorities.

The issuance of subpoenas does not confirm any wrongdoing by the banks or the hedge fund, as information requests can be part of routine regulatory examinations.