SEC subpoenas top banks for data on hedge fund Situational Awareness after AI-stock sell-off

The U.S. Securities and Exchange Commission sent subpoenas to a group of prominent Wall Street banks to obtain details about the trading activity of hedge fund Situational Awareness, according to people familiar with the confidential matter. The fund was compelled to liquidate numerous positions last month after a wave of margin calls during a sharp decline in AI-related stocks. Citadel, headed by Ken Griffin, stepped in to purchase the bulk of its public equity bets.

An SEC spokesperson declined to comment, noting that a subpoena does not automatically mean the entity is the focus of an investigation and such probes can conclude without enforcement. Situational Awareness said that, given its high-profile returns and recent dramatic drawdowns, regulatory scrutiny is expected and it will cooperate fully. One outlet had earlier reported on the SEC’s subpoenas.