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Big Banks Subpoenaed Over Hedge Fund Run by 24-Year-Old
Newser • • business
Key Points:
- The SEC has issued subpoenas to banks including Citi, JPMorgan, Goldman Sachs, and Bank of America for information on the trading and borrowing practices of Situational Awareness, a hedge fund led by 24-year-old Leopold Aschenbrenner.
- Situational Awareness, which once managed over $30 billion and heavily leveraged AI-related stock bets, experienced a severe decline, with its portfolio value dropping 67% in July alone.
- The fund's losses increased as AI stocks fell and traditional tech stocks it shorted rose, leading to a significant portfolio sell-off to Citadel at a discount.
- Despite the setbacks, Situational Awareness retains a stake in AI startup Anthropic, which is planning a major IPO.
- The SEC has not formally accused the fund of any wrongdoing, but the situation highlights the risks associated with leverage in the AI investment boom.
