Futu Holdings Faces Securities Class Action Over Regulatory Penalties

The lawsuit, filed by Levi & Korsinsky, LLP, alleges that Futu Holdings knowingly concealed the extent of its regulatory exposure while reporting record growth. According to the complaint, management continued to tout surging trading volumes and revenue gains throughout the class period, despite being fully aware that its mainland China operations lacked the necessary licenses for securities and futures business.

While the company’s SEC filings used speculative language regarding potential regulatory hurdles, the lawsuit contends that Futu was actively conducting unlicensed business for years. The proposed penalty of RMB 1.85 billion—which includes the confiscation of RMB 470 million in alleged illegal gains—highlights a significant discrepancy between the firm's public financial disclosures and its internal operational reality. Investors who suffered losses during this period are encouraged to evaluate their eligibility for the class action, which covers both current shareholders and those who have since sold their positions.