The SEC reportedly sent summonses to a number of large banks on Wall Street to investigate the collapse of the AI-themed hedge fund Situal Awaness last month. Supervisors would like to know about the Fund ' s transactions, the use of leverage and the record of communication with financing banks.

In July, the technology unit returned to its backward position and was put down.

This investigation took place after the rapid decline of the technology unit in July. General Awareness suffered heavy damage during the round, with assets reported to have dropped sharply from approximately $45 billion to about $10 billion.

The fund is led by a former OpenAI researcher, Leopold Aschenbrenner, and is based on publicly listed shares, with a concentrated and highly leveraged warehouse. It was reported that its holdroom included SK Hercules and CoreWeave. The increased losses were followed by additional bond requirements triggered by a number of main brokers and the Fund was then forced to reduce its position significantly.

The summons involved major financing institutions such as Goldman Sachs

According to information sources cited by Reuters, the institutions receiving summonses include Goldman Sachs, Morgan Chase, Citi and the United States Bank. Supervisors would like to obtain information from these banks on the Fund ' s transactions, financing and communication.

Goldman Sachs refused to comment. CNBC states that Morgan Chase, Citicorp and the Bank of the United States were contacted to respond.

Citadel discount drive part position

After the Fund was forced to settle, Ken Griffin ' s multi-strategy hedge fund Citadel bought the relevant position at a discount of approximately 10 per cent. In a letter to investors last Friday, Griffin indicated that Citadel had since disposed of about 80 per cent of the risk exposure associated with the portfolio.

Reports also indicate that SK Hercules and CoreWeave have since rebounded.

Regulatory investigations don't necessarily point to enforcement.

According to the report, the United States SEC ' s call did not mean that the bank or the Situal Awairness had been found to have committed misconduct. Such investigations may also be concluded without follow-up enforcement action.

In its statement, the Government stated that it was no surprise for regulators to review high-profile, high-yielding or high-impact funds. The Fund stated that it was in a highly regulated industry and would fully comply with regulatory requirements.