The lawsuit, led by the firm Levi & Korsinsky, focuses on investors who purchased Futu securities between May 24, 2023, and May 27, 2026. According to the complaint, Futu continued to solicit mainland Chinese clients for securities, public fund sales, and futures trading despite lacking the necessary approvals from the China Securities Regulatory Commission (CSRC). While regulators flagged these cross-border activities as early as December 2022, the company allegedly maintained its growth trajectory by failing to disclose the legal risks surrounding its core business model.
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Investors Target Futu Holdings in Class Action Over Unlicensed Operations
Shareholders of Futu Holdings Limited are seeking damages in a pending class action lawsuit, alleging the brokerage concealed its reliance on unlicensed operations in mainland China. The litigation follows a sharp 27.5% share price decline triggered by the proposal of RMB 1.85 billion in regulatory penalties against the firm.
Regulatory Penalties and Financial Impact
The financial fallout became apparent in May 2026, when the CSRC proposed confiscating RMB 470 million in illegal gains alongside an additional RMB 1.38 billion in fines. The proposed penalties, which also include a personal fine against the company's founder, forced Futu to report a significant reduction in its first-quarter 2026 net income. Although the Futubull app was removed from Chinese app stores in 2023 to comply with rectification requirements, the lawsuit contends that the brokerage continued to serve existing mainland clients, effectively misleading shareholders about the sustainability of its revenue streams. Investors impacted by these developments have until August 25, 2026, to apply for lead plaintiff status in the ongoing proceedings.
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