JPMorgan has cut off financing to Situational Awareness, the hedge fund run by Leopold, who has been dubbed an "AI stock guru," according to a Sept. 13 report cited by BlockBeats. People familiar with the matter said the bank, one of the fund’s main providers of stock borrowing and financing, told the firm it was ending the lending relationship after losses were disclosed. Neither side commented.
The pullback does not mean every Wall Street bank has exited. Goldman Sachs, Citigroup and Bank of America are still providing prime brokerage services to Situational Awareness, and the fund has recently added boutique broker Clear Street. Leopold had previously told investors after the blowup that the fund was nearing what he described as an "unacceptable permanent impairment of capital." He also said the fund would reduce leverage while staying long the fundamentals of the AI trade.
Over the past two weeks, the fund has resumed buying call options on AMD, Bloom Energy, CoreWeave, SK hynix and SanDisk, showing it is still trying to re-enter the market.
JPMorgan has cut off financing to Situational Awareness, the hedge fund run by Leopold, the trader described in the report as an "AI stock guru," according to BlockBeats on Sept. 13.
People familiar with the matter said JPMorgan had been one of the fund’s main providers of stock borrowing and financing. After the fund disclosed losses, the bank notified Situational Awareness that it was terminating the lending relationship. Neither side commented.
Not all Wall Street banks have pulled back from the fund. Goldman Sachs, Citigroup and Bank of America are still providing prime brokerage services to Situational Awareness. The fund has also recently added boutique broker Clear Street.
After the blowup, Leopold told investors that the fund had come close to what he called an "unacceptable permanent impairment of capital." He also said the fund would cut leverage and remain long AI fundamentals.
In the past two weeks, the fund has started buying call options again on AMD, Bloom Energy, CoreWeave, SK hynix and SanDisk, in an effort to return to the market.
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