Susquehanna alleges traders made over $100 million from Chinese brokerage crackdown
A Manhattan lawsuit says unknown traders bought U.S.-listed put options before China’s May 22 crackdown on Futu and Up Fintech, while the SEC and Justice Department are investigating related insider-trading allegations.
Susquehanna International Group alleges unknown traders earned at least $100 million by buying U.S.-listed put options on Futu Holdings and Up Fintech before China’s May 22 crackdown on the brokerages. SIG’s June 29 lawsuit in Manhattan said the trades cost about $12 million, generated at least $100 million in profit and left Susquehanna with losses of more than $70 million as a counterparty. The U.S. Securities and Exchange Commission is investigating the insider-trading allegations, and the Justice Department is also probing the matter. A U.S. court has frozen related accounts at Interactive Brokers and on Futu and Up Fintech platforms while allowing subpoenas to identify the beneficial owners behind the trades.
- put options: Options contracts that generally gain value when the price of the underlying security falls.
- beneficial owners: The individuals or entities that ultimately own or control assets, even if accounts are held in another name.
- insider trading: Trading using material nonpublic information.