A $30 Billion AI Fund Implodes, Now the SEC Is Investigating Wall Street’s Role

The Securities and Exchange Commission (SEC) has sent subpoenas to major Wall Street banks over their dealings with Situational Awareness, the artificial intelligence (AI) hedge fund that nearly collapsed last month.

Three people briefed on the outreach described the requests to the New York Times. Regulators want trade timing data and lender communications. The fund has not been accused of wrongdoing.

SEC Investigation Targets the Leverage Paper Trail

The subpoenas went to banks that cleared the fund's trades and financed its positions. Bank of America, Citi, Goldman Sachs, and JPMorgan Chase ranked among its largest counterparties, according to a regulatory filing.

Investigators asked for the timing of specific trades. They also requested messages the banks exchanged with the fund about borrowed money, and told them to preserve every record tied to the San Francisco firm.

All four banks declined to comment. So did the SEC. A Situational Awareness spokesman said scrutiny of this kind was predictable.

… Continue reading the full article at the original source below.