The U.S. Securities and Exchange Commission has issued subpoenas to major Wall Street banks as part of an early-stage investigation into trading activity by the AI-focused hedge fund Situational Awareness.
The regulator is seeking information on the fund’s communications with lenders regarding its leverage levels and the timing of its trades, according to a report by The New York Times. The probe follows Situational Awareness’s decision to sell the bulk of its public equities portfolio to Citadel last month, a move attributed to losses in its technology holdings.
The SEC’s requests mark the latest regulatory scrutiny of hedge fund operations amid rapid growth in AI-driven investment strategies. The investigation remains in preliminary stages, and the commission has not indicated whether it will pursue fines or other enforcement actions. A spokesperson for the SEC declined to comment.
