FT: The SEC subpoenaed 4 Wall Street banks over the financing behind Situational Awareness’s AI-stock near-collapse.

For context, Situational Awareness grew to more than $20B in assets in under 2 years, using bank borrowing to amplify concentrated AI-linked positions.
And they could build this unusually large AI positions because Goldman Sachs, JPMorgan, Citigroup and Bank of America supplied borrowed capital.

That concentration became dangerous in July, when the tech sell-off triggered steep losses and forced the fund to unwind most public equities.

Citadel bought the bulk of those positions at roughly a 10% discount in an emergency deal assembled within 24 hours.
It has since sold more than 80% of the portfolio through almost 100 block trades worth over $4B.

IMO, for future, Situational Awareness probably will survive as an investment firm, but reproducing its earlier return profile will be materially harder without rebuilding the risk that nearly broke it.