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SEC subpoenas Wall Street banks tied to AI hedge fund Situational Awareness

The SEC is seeking information on the fund's trading activity and its use of leverage before it neared collapse last month.

Reported · Written up by our desk · Hedge Funds

The U.S. Securities and Exchange Commission has reportedly issued subpoenas to several Wall Street banks that worked with AI-focused hedge fund Situational Awareness, according to coverage of the matter by CNBC Markets and CNBC World.

Hedgeweek reports, citing Reuters, that the SEC is asking banks for information related to the fund's trading activity and the financing and leverage used before the near-collapse last month.

The subpoenas focus on the banks' involvement with Situational Awareness and seek details about trades and funding arrangements tied to the hedge fund’s operations.

The developments add regulatory pressure around the circumstances leading up to the fund’s abrupt stress, with the SEC seeking records that could shed light on how the strategy was financed and how leverage was employed.

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