China’s securities regulator said it is monitoring a US lawsuit filed by market maker Susquehanna International Group over alleged insider trading linked to Beijing’s May 22 crackdown on offshore trading.

The campaign, launched by eight Chinese agencies, targeted unauthorized offshore investment services.

Authorities penalized Futu Holdings, Up Fintech’s Tiger Brokers, and Long Bridge Securities for operating on the mainland without a license.

Affected mainland clients can sell existing holdings and withdraw funds but cannot buy new securities or add funds to their accounts.

Susquehanna’s lawsuit, filed in Manhattan on June 29 against 100 John Doe defendants, alleged the traders spent US$12 million on short-dated put options tied to Futu and Up Fintech before making more than US$100 million.

A judge froze certain accounts at Interactive Brokers and on the platforms of Futu and Up Fintech that were allegedly used for the trades, while the US Securities and Exchange Commission and the Justice Department were examining the case.

The lawsuit adds to scrutiny of the brokers, which were barred from onboarding new mainland investors in 2022 and had their apps removed in 2023 from mainland app stores.

🔗 Source: Bloomberg