Situational Awareness, a once hot artificial intelligence-focused hedge fund led by a 24-year-old, became the talk of Wall Street when it nearly imploded late last month.

Now it is attracting attention from securities regulators, too.

The Securities and Exchange Commission recently sent subpoenas to banks that handled the hedge fund’s calamitous trading and that fed it borrowed money to supersize its bets, according to three people briefed on the outreach who were not permitted to discuss it publicly.

The subpoenas asked for details on the timing of Situational Awareness’ trades and for its communications with lenders about the money it was borrowing, also known as “leverage,” two of those people said. The subpoenas additionally warned the banks to preserve any information regarding the San Francisco hedge fund.

The SEC oversees financial markets with an eye toward protecting small investors, and has brought civil cases regularly against investment firms that produced large losses. Any investigation into Situational Awareness would be at its earliest stages, and it’s no guarantee that it would lead to fines or other punishment. The hedge fund has not been accused of wrongdoing.

“It is to be expected that regulators would closely examine any funds that are high profile, produce significant returns or have particularly dramatic drawdowns,” a Situational Awareness spokesperson said in a statement. “We are a highly regulated business and will cooperate to the fullest extent with any regulatory request.”

The SEC declined to comment.

At its peak, Situational Awareness managed more than $30 billion, and borrowed tens of billions more. It was a major client of firms including Bank of America, Citi, Goldman Sachs and JPMorgan Chase, according to a regulatory filing.

Spokespeople for Bank of America, Citi, Goldman Sachs and JPMorgan declined to comment.

Situational Awareness had a fast rise and an even quicker retreat. Founded just two years ago by Leopold Aschenbrenner, a former researcher at OpenAI, it rode the AI boom to soaring investment returns.

To achieve those results, however, the fund relied on heavy borrowing, as well as complicated and expensive financial instruments that magnify gains — and losses. The latter piled up quickly last month when the stock prices of publicly traded, high-flying AI companies dipped. At the same time, shares in more traditional technology companies — which the hedge fund had been betting against — rose, compounding the problem.

Situational Awareness was forced into a fire sale. It wound up selling most of its stock portfolio to a rival, Citadel, at a discount.

(A Citadel spokesperson declined to comment when asked whether the firm had received a subpoena.)

Situational Awareness still has some hope. The fund held on to a stake in the AI company Anthropic, which has plans to go public at a valuation that could be as high as $2 trillion. Aschenbrenner’s wife is the chief of staff to Anthropic’s CEO, Dario Amodei.

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This article originally appeared in The New York Times.

By: Rob Copeland and Matthew Goldstein/Nicholas Albrecht

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