SEC probes insider trading allegations involving Futu and Tiger Brokers, with options bets yielding $100 million in profits

OdailyOdaily reports that, according to sources familiar with the matter, U.S. regulators are investigating allegations made by Susquehanna International Group. The allegations claim that unknown insider traders made $100 million in profits through options bets ahead of China's recent regulatory crackdown on cross-border brokerages Futu and Tiger Brokers. Susquehanna disclosed these allegations in a lawsuit filed in Manhattan federal court on June 29.

Sources said the U.S. SEC is reviewing the trades described in the market maker's complaint. Susquehanna stated in the lawsuit that it lost over $70 million as the counterparty to most of the alleged insider trading. The lawsuit claims traders purchased U.S. exchange-traded options on Chinese securities firms, which subsequently became targets of a regulatory crackdown on May 22. The scope and stage of the SEC investigation remain unclear. A U.S. judge on June 29 granted Susquehanna's request to freeze related accounts. The Chinese government stated that Futu and Tiger Brokers provided unlicensed trading services to mainland residents. Shares of both companies fell following the May 22 announcement. Futu was fined RMB 1.85 billion in regulatory penalties, and founder Leaf Li's wealth decreased by $1.7 billion in a single day. (straitstimes)