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

Odaily Planet Daily News According to sources, U.S. regulators are investigating allegations raised by Susquehanna International Group. The allegations claim that an unknown insider trader made $100 million in profits through options bets shortly before China's recent regulatory crackdown on cross-border brokerages Futu and Tiger Brokers. Susquehanna disclosed these allegations in a lawsuit filed on June 29 in Manhattan federal court.

Sources say 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 a counterparty to most of the alleged insider trades. The lawsuit claims that traders purchased U.S. exchange-traded options of Chinese securities firms, which subsequently became targets of a regulatory crackdown on May 22. The scope and status of the SEC investigation remain unclear. A U.S. judge approved Susquehanna's request to freeze related accounts on June 29. The Chinese government stated that Futu and Tiger Brokers provided unlicensed trading services to mainland residents. Shares of both companies fell after 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)