Slashdot

News for nerds, stuff that matters

SEC Investigating Near-Implosion of AI Hedge Fund

The SEC is investigating the near-collapse of AI-focused hedge fund Situational Awareness, sending subpoenas to major Wall Street banks for details about the fund's trades, borrowing, and communications with lenders. The fund, founded by former OpenAI researcher Leopold Aschenbrenner, managed over $30 billion and borrowed tens of billions more before leveraged bets unraveled, forcing it to sell most of its stock portfolio to Citadel at a discount. The New York Times reports: The subpoenas asked for details on the timing of Situational Awareness's trades and for its communications with lenders about the money it was borrowing, also known as "leverage," two of those people said. The subpoenas additionally warned the banks to preserve any information regarding the San Francisco hedge fund. The S.E.C. oversees financial markets with an eye toward protecting small investors, and has brought civil cases regularly against investment firms that produced large losses. Any investigation into Situational Awareness would be at its earliest stages, and it's no guarantee that it would lead to fines or other punishment. The hedge fund has not been accused of wrongdoing.

[...] Situational Awareness had a fast rise and an even quicker retreat. Founded just two years ago by Leopold Aschenbrenner, a former researcher at OpenAI, it rode the A.I. boom to soaring investment returns. To achieve those results, however, the fund relied on heavy borrowing, as well as complicated and expensive financial instruments that magnify gains -- and losses. The latter piled up quickly last month when the stock prices of publicly traded, high-flying A.I. companies dipped. At the same time, shares in more traditional technology companies -- which the hedge fund had been betting against -- rose, compounding the problem. Situational Awareness was forced into a fire sale. It wound up selling most of its stock portfolio to a rival, Citadel, at a discount.

The Guardian

Latest news, sport, business, comment, analysis and reviews from the Guardian, the world's leading liberal voice

‘Honest leaders are the first step to a better future’: Cockroach hunger striker targets India’s political class

Sonam Wangchuk’s fast was spark that drove youth protest movement – and now he wants to cleanse the political system

For 26 days, India watched as Sonam Wangchuk wasted away. His hunger strike, held in solidarity with India’s “Cockroach” youth protest movement, would prove to be one of the most politically consequential fasts held in the country’s modern history.

Many in the country view the gruelling fast, which began on 28 June, as the crucial spark that helped propel the Cockroach movement into one of the most formidable challenges to the government of prime minister, Narendra Modi, in more than a decade.

2026-08-25 00:00:42