Key points
- The SEC sent subpoenas to Bank of America (BAC), Citigroup (C), Goldman Sachs (GS), and JPMorgan Chase (JPM), seeking records on Situational Awareness's trading and its dealings with lenders, the New York Times reports.
- Leopold Aschenbrenner's fund lost about 67% in July before Citadel bought most of its public stock positions at a discount of more than 10%.
- The inquiry is at an early stage, and neither the fund nor any bank has been accused of wrongdoing.
The SEC has sent subpoenas to four Wall Street banks over Situational Awareness, the AI-focused hedge fund run by Leopold Aschenbrenner, according to a New York Times report citing people familiar with the matter. Bank of America (BAC), Citigroup (C), Goldman Sachs (GS), and JPMorgan Chase (JPM) were told to preserve all records tied to the fund, the report says.
The subpoenas seek the timing of the fund's trades and its communications with lenders about loans and leverage. They are the first public sign of regulatory scrutiny since Aschenbrenner's fund came close to collapse in late July, after growing to manage more than $30 billion at its peak while borrowing tens of billions more.
Situational Awareness lost about 67% of its value in July. Two positions drove most of the damage: SanDisk (SNDK) and Micron (MU) together made up about 55.5% of the fund's disclosed U.S. stock holdings at the end of June, and SanDisk fell nearly 47% that month while Micron dropped about 29%.
The resulting margin calls forced the fund to unwind most of its public-equity book, including long and short positions. Citadel bought the majority of those positions at a discount of more than 10% in a deal reached just before the market opened on July 30, according to Reuters Breakingviews. We subsequently tracked Core Scientific (CORZ) block trades that followed the broader unwind, though the underlying filing did not identify the buyers.
Bank of America, Goldman Sachs, and JPMorgan Chase served as the fund's prime brokers through the unwind. Speaking publicly about the episode earlier in August, Bank of America chief executive Brian Moynihan called it a warning shot for markets carrying heavy leverage.
Ken Griffin, Citadel's founder, later told clients his firm had unwound more than 80% of the risk from the portfolio it bought, a figure we covered when his client letter came out. An August 14 filing showed that SanDisk and Micron represented about 55.5% of the fund's reported U.S. equity portfolio as of June 30, one month before the Citadel transaction. The filing does not reveal what the fund bought after the sale.
The SEC's work is still preliminary, and the inquiry may not result in fines or other penalties. Regulators have not disclosed whether they are focused on trade timing, disclosure shortcomings, prime broker conduct, or some combination. The SEC and all four banks declined to comment on the report.
Sources
- The New York Times, reporting the SEC subpoenas of Bank of America, Citigroup, Goldman Sachs, and JPMorgan Chase (Aug. 24, 2026), via Reuters' summary of the report
- Reuters Breakingviews, on the discount at which Citadel bought the portfolio
- Situational Awareness LP's second-quarter 13F-HR, filed Aug. 14, 2026 (SEC EDGAR)
- Yahoo Finance, on Citadel's unwind of the acquired portfolio
- CNBC, on Brian Moynihan's warning shot comments
