SEC targets US banks in Situational Awareness hedge fund probe; NatWest steps up US expansion with Connecticut office

The SEC subpoenaed major banks, including Goldman Sachs, JPMorgan Chase, Citigroup, and Bank of America, for information on their dealings with the AI-focused hedge fund Situational Awareness, which nearly collapsed in July. The fund, which managed $45 billion at its peak, lost $35 billion after margin calls. Its portfolio was heavily concentrated in AI infrastructure stocks like Sandisk and Micron. Citadel purchased the fund's portfolio at a discount and has since unwound most of the risk.

The SEC has reportedly subpoenaed Goldman Sachs, JP Morgan, Citigroup, and Bank of America regarding their ties to AI hedge fund Situational Awareness, which saw assets drop from $45B to $10B in July. The fund, led by ex-OpenAI researcher Leopold Aschenbrenner, faced margin calls and sold positions to Citadel at a discount. SK Hynix and CoreWeave were among the affected holdings. The SEC seeks details on trades, leverage, and communications, but no wrongdoing has been alleged.

The SEC is investigating the near-collapse of AI-focused hedge fund Situational Awareness, subpoenaing major banks for trade and leverage details. The fund, founded in 2024, managed $30B and returned 1,000% before a July crash. Its concentrated bets on Micron and SanDisk triggered margin calls, leading to a fire sale to Citadel. Citadel unwound 80% of the acquired risk, boosting its flagship fund's performance. The fund retains a stake in Anthropic, potentially valued at $2T.

JPMorgan (JPM) and Santander are leading a $14B-$15B financing effort for Argentina LNG, a $24B project to export Argentina's shale gas. Partners include YPF, Eni, and XRG, with a final investment decision expected in late November. The project exceeds Argentina's $20B IMF agreement.

The SEC has subpoenaed Bank of America, Citi, Goldman Sachs, and JPMorgan Chase as part of an investigation into the near-collapse of AI-focused hedge fund Situational Awareness, which saw a 67% portfolio wipeout in July. The inquiry focuses on the fund's trading timing, leverage, and communications with lenders. Situational Awareness, founded in 2024, had managed over $30 billion and held significant stakes in SanDisk and Micron, which experienced sharp declines in July. The fund's liquidation

Citigroup approved a $30 billion buyback plan, 13.6% of its market cap. Shares fell 5.5% last week but rose 1.5% on Friday. Analysts' average price target is $154.50, suggesting 17.4% upside. Citi's Q2 revenue rose 14% to $24.8 billion, with net income up 45% to $5.8 billion. CEO Jane Fraser noted the highest revenue in a decade, funding buybacks and dividends. Citi's CET1 ratio is 12.8%, above the required 11.6%.