Overview
- Susquehanna says that between May 7 and May 21 unidentified traders bought about 200,000 short-dated put options tied to Futu and Up Fintech for roughly $12 million, a move that paid out more than $100 million after the regulatory announcement.
- Short-dated puts are fast-expiring bets that rise sharply if a stock collapses, so concentrated purchases just before a regulatory shock are suspicious because timing normally erodes their value.
- Beijing announced a crackdown on unlicensed cross-border brokerages on May 22 and fined Futu about 1.85 billion yuan, a step that sent the two firms’ U.S.-listed shares sharply lower.
- Susquehanna filed a Manhattan federal suit on June 29 naming up to 100 John Doe defendants, has won court-ordered freezes on suspect accounts, and is seeking subpoenas to brokerages including Interactive Brokers, Futu, and Tiger Brokers to identify traders.
- The case has prompted reported DOJ and SEC probes and drawn monitoring from China’s CSRC, raising questions about how U.S. and Chinese authorities will share data and whether criminal charges will follow if account holders are identified.