The Securities and Exchange Commission has subpoenaed Bank of America, Citi, Goldman Sachs and JPMorgan Chase as part of an early-stage investigation into the near collapse of Situational Awareness, the AI-focused hedge fund that saw roughly two-thirds of its portfolio value wiped out in July, The New York Times reported, citing people briefed on the outreach.

The subpoenas seek details on the timing of the fund’s trades and its communications with lenders about borrowed money, or leverage. Regulators have also instructed the banks to preserve any related records.

Situational Awareness has become one of the most dramatic hedge fund rise-and-fall stories of the current cycle. Founded in 2024 by Leopold Aschenbrenner, a former OpenAI researcher now in his mid-20s, the fund grew to manage more than $30 billion while borrowing tens of billions more to amplify bets on AI-linked chip stocks. Through June 2026, it had returned more than 1,000%.

That run reversed abruptly in July. At the end of June, the fund held stakes worth roughly $5.7 billion in SanDisk and $5.6 billion in Micron. Together, those positions accounted for more than 56% of its U.S. portfolio. SanDisk fell nearly 47% in July, while Micron dropped about 29%, triggering margin calls and forcing a fire sale of the fund’s public equity portfolio to Citadel at around a 10% discount. The sequence put a spotlight on how quickly leverage can compound losses when a portfolio is highly concentrated in a narrow corner of the market.

Citadel quickly moved to reduce the risk it had taken on. In a letter to clients, founder Ken Griffin said the firm had already unwound more than 80% of the aggregate risk from the acquired portfolio through more than 100 block trades worth over $4 billion in three weeks. Griffin added that only Citadel could have delivered a solution of that scale on that timeline. The rescue purchase helped Citadel’s flagship multistrategy fund post its best monthly performance since 2022. A Citadel spokesman declined to say whether the firm had also received a subpoena.

Situational Awareness said it is cooperating fully with regulators and described itself as a highly regulated business. The fund said scrutiny is to be expected for high-profile managers or those that have experienced dramatic drawdowns. It has not been accused of wrongdoing, and the investigation remains in its earliest stages with no indication yet of fines or other action.

What regulators are specifically examining has not been disclosed. Possible areas of inquiry could include market manipulation, disclosure failures, prime broker conduct or other issues, but officials have not made that public.

Micron and SanDisk, the two stocks at the center of the fund’s forced liquidation, have become a reference point for how concentrated, leveraged positioning can magnify moves in AI-related chip names during a drawdown. For banks and brokers, the subpoenas also indicate that regulators are likely looking beyond the fund itself to the financing and recordkeeping around the trades.

The episode has also shifted risk rather than eliminated it. Citadel’s rapid absorption and unwind of the acquired portfolio, along with a strong July for its flagship fund, underscored how the fallout spread across Wall Street.

Situational Awareness still retains a stake in Anthropic, which has discussed a potential listing at a valuation that could reach as high as $2 trillion. That holding could keep the fund in focus as the SEC’s inquiry develops, even after the collapse of much of its public equity book.