The $30 Billion Silence: Why SEC Subpoenas Wall Street's Role in the AI Fund Collapse
Ivytoshi
The SEC is investigating the $30 billion collapse of AI fund Situational Awareness, but the subpoenas are not aimed at the 24-year-old founder. They are directed at Bank of America, Citigroup, Goldman Sachs, and JPMorgan. This is a systemic shift in how regulators view the 'bank-fund' leverage chain. The question is not whether the fund made bad bets, but whether the banks knew the risks and continued to finance them. The investigation hinges on 'aiding and abetting' theories and the banks' duty to monitor for systemic fragility. The silence before the algorithmic deleveraging is now a loud battlefield. This report analyzes the regulatory signals, the banks' liability, and the future of AI-themed fund financing.