Futu faces securities class action probe after $273M CSRC fine

Rosen Law Firm opened a securities class action investigation into Futu Holdings Ltd. on June 12, alleging the brokerage issued materially misleading business information to the investing public.

"Futu may have issued materially misleading business information to the investing public," the firm said in a statement.

The investigation follows a May 22 announcement that the China Securities Regulatory Commission proposed a $273 million penalty against Futu for operating unlicensed securities and futures businesses targeting mainland Chinese clients. Futu shares fell 28% that day, dropping from $123.86 to $89.76. Founder Leaf Li faces a separate personal fine of 1.25 million yuan.

The penalty represents roughly one-third of Futu's $746.9 million in Q1 2026 revenue. Mainland Chinese clients now account for just 13% of funded accounts, down from a majority in prior years, as the company pivots to international markets through its Moomoo brand. Overseas clients represent more than 55% of funded accounts.

Futu reported 3.59 million funded accounts in the first quarter, up 34.3% from a year earlier, with total client assets reaching $155.8 billion. Trading volume for the quarter hit $529.4 billion. The company has also pushed into licensed virtual asset trading in Hong Kong through its PantherTrade platform.

Kirby McInerney LLP separately opened an investigation into potential securities law violations by Futu and its senior management on June 10, citing the same CSRC penalty announcement.

The investigation puts additional pressure on Futu's stock, which has traded below $90 since the CSRC penalty was disclosed. Investors will watch for any further regulatory actions from Chinese authorities and the outcome of the shareholder investigation as key catalysts in the coming months.

This article is for informational purposes only and does not constitute investment advice.