FINANCE

Online Broker Futu Sued in U.S. Over Undisclosed China Regulatory Risks

Published: Jul. 15, 2026 5:31 p.m. GMT+8

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An investor has filed a securities class-action lawsuit in the U.S. against online brokerage Futu Holdings Ltd. and its top executives, alleging they concealed the regulatory risks of its Chinese mainland operations.

The complaint, filed in the Southern District of New York, names Futu, CEO Leaf Hua Li and Chief Financial Officer Arthur Yu Chen. It claims they violated the U.S. Securities Exchange Act by failing to adequately disclose the dangers of offering services in China.

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Explore the story in 30 seconds

Investor sues Futu Holdings, CEO, CFO for hiding China regulatory risks.
China regulator's penalty plan in May triggered 35% stock drop and $273 million provision.
U.S. market makers sue over $100 million illicit options profits from front-running.

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Who’s Who

Futu Holdings Ltd.: Futu Holdings Ltd. is facing a U.S. class-action lawsuit for allegedly concealing regulatory risks in China. Its shares fell 35% after China's regulator announced penalties. The company booked a 1.38 billion yuan provision, significantly impacting net profit.

Tiger Brokers: According to the article, Tiger Brokers faced planned penalties from China's securities regulator in late May alongside Futu Holdings for providing unauthorized securities services on the mainland. The resulting regulatory crackdown triggered class-action lawsuits in the U.S. and caused significant share price drops for related companies.

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What Happened When

Late May 2026：: China's securities regulator announced planned penalties against Futu and Tiger Brokers for providing unauthorized securities services on the mainland, causing Futu's shares to drop 35%.

Days after late May 2026：: Futu booked a 1.85 billion yuan ($273 million) provision for an anticipated fine, reducing its first-quarter net profit by 61.2% year-on-year and triggering another stock sell-off.

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