SEC Investigates Situational Awareness LP After Near-Collapse

The United States Securities and Exchange Commission is investigating the near-implosion of Situational Awareness LP, a San Francisco-based AI-focused hedge fund. The regulator issued subpoenas to major Wall Street banks, including Bank of America, Citi, Goldman Sachs, and JPMorgan Chase, to examine the fund's trading timing and communications regarding its use of leverage.

Founded by former OpenAI researcher Leopold Aschenbrenner, the fund managed over $30 billion at its peak. In July, a global selloff in chip stocks caused the fund's portfolio value to drop 67%, while traditional technology stocks rose. To avoid total collapse, the fund conducted a fire sale of most of its public equities portfolio to rival firm Citadel LLC at a discount. Situational Awareness LP continues to hold a stake in the AI company Anthropic.

The SEC is specifically probing the timing of trades that triggered margin calls and the interactions between the fund and its primary lenders. A spokesperson for the firm stated that the business is highly regulated and will cooperate to the fullest extent with any regulatory request.