Futu Holdings Class Action Lawsuit – FUTU

Key Facts About Futu Holdings Limited (NASDAQ: FUTU)

● The Allegation: Futu allegedly continued to conduct securities brokerage, public fund sales, and futures business in mainland China without the required licenses, even after the China Securities Regulatory Commission (CSRC) initiated inquiries in December 2022. The company's quarterly and annual filings allegedly overstated financial results as a result of Futu's continued noncompliance with CSRC requirements and the company's exposure to regulatory penalties.

● The Stock Drop: FUTU fell $34.10 per share, or 27.5%, to close at $89.76 per share on May 22, 2026, after Reuters reported a CSRC crackdown on cross-border brokers and Futu disclosed a proposed penalty of approximately RMB 1.85 billion (approximately USD 271 million); FUTU then fell an additional $5.31 per share, or 4.8%, to close at $104.91 per share on May 28, 2026, when Futu reported Q1 2026 results reflecting the penalty charges.

● Class Period & Defendants: The Class Period runs from May 24, 2023 through May 27, 2026, inclusive. The named defendants are Futu Holdings Limited, Leaf Hua Li (Chief Executive Officer), and Arthur Yu Chen (Chief Financial Officer).

● Lead Plaintiff Deadline: August 25, 2026. No action is required before the deadline to remain a potential class member. Action is only needed if you wish to seek appointment as lead plaintiff.

Futu Holdings Class Action Summary


Company	Futu Holdings Limited (NASDAQ: FUTU)
Lead Plaintiff Deadline	August 25, 2026
Class Period	May 24, 2023 – May 27, 2026
Stock Drop	May 22, 2026 – FUTU fell $34.10 (27.5%) to $89.76; May 28, 2026 – FUTU fell $5.31 (4.8%) to $104.91

Introduction

A securities class action has been filed against Futu Holdings Limited (NASDAQ: FUTU). The lawsuit was filed in the U.S. District Court for the Southern District of New York. The Class Period runs from May 24, 2023 through May 27, 2026.

The complaint alleges Futu made materially false and misleading statements about its regulatory compliance. Specifically, Futu allegedly kept running unlicensed securities businesses in mainland China. At the same time, its public filings framed regulatory risk as merely hypothetical.

On May 22, 2026, a CSRC crackdown and a proposed $271 million penalty were disclosed. FUTU shares fell $34.10 per share, or 27.5%, in a single day. Investors who bought FUTU during the Class Period may have suffered significant losses.

Company Profile

Futu Holdings Limited provides digitalized securities brokerage and wealth management product distribution services in Hong Kong and internationally. The company's platform serves millions of users across multiple markets, offering trading access to U.S., Hong Kong, and other securities markets.

Class Period

May 24, 2023–May 27, 2026

Investors who purchased or acquired Futu Holdings Limited (FUTU) securities during the Class Period and suffered losses may be eligible to seek recovery under the federal securities laws.

Allegations

The complaint alleges that throughout the Class Period, Futu Holdings and its senior officers, Chief Executive Officer Leaf Hua Li and Chief Financial Officer Arthur Yu Chen, made materially false and misleading statements about the company's business, operations, and regulatory compliance. In December 2022, the CSRC publicly announced it had initiated inquiries into Futu's cross-border operations in mainland China, stating that the company had conducted securities business with domestic investors without regulatory consent. Futu was banned from opening new accounts for mainland Chinese investors, and in May 2023, its Futubull app was removed from app stores in China.

Despite these actions, the complaint alleges defendants failed to disclose that Futu continued to conduct securities business, public fund sales business, and futures business in mainland China without obtaining the requisite licenses or approval. From May 2023 through early 2026, Futu issued quarterly earnings press releases touting growth in paying clients, registered clients, total client assets, and revenue. The company's annual reports on Form 20-F for fiscal years 2023, 2024, and 2025 acknowledged the CSRC inquiries but characterized potential penalties in speculative terms, stating the company had "limited information to accurately predict if any disciplinary action or punishment will be taken" and that penalties "may" have a material adverse impact. According to the complaint, these disclosures were materially misleading because defendants knew or recklessly disregarded that Futu was actively violating Chinese securities laws by continuing unlicensed operations.

The complaint further alleges that as a result of Futu's continued unlicensed activity and exposure to regulatory penalties including disgorgement of ill-gotten gains, the company's reported financial results were overstated. The complaint contends defendants' positive statements about Futu's business, operations, and prospects lacked a reasonable basis, and that Futu was reasonably likely to face regulatory penalties, including the disgorgement of ill-gotten gains and substantial fines. As of the end of the first quarter of 2026, funded accounts from mainland China still accounted for approximately 13% of Futu's total funded accounts, according to Futu's May 22, 2026 press release.

The Truth Emerges

On May 22, 2026, before the market opened, Reuters published an article reporting that the CSRC, along with seven other Chinese government agencies including the central bank, had launched a major crackdown on cross-border investment activities. The article identified Futu, along with Tiger Brokers and Longbridge, as targets that would be penalized for soliciting business in China without an onshore license. On the same date, Futu issued a press release disclosing it had received a Notice of Investigation and an Administrative Penalty Pre-Notification Letter from the CSRC. The letter stated that certain Futu entities in mainland China and Hong Kong had conducted securities business, public fund sales business, and futures business in mainland China without the requisite licenses or approval. The CSRC proposed total penalties of approximately RMB 1.85 billion (approximately USD 271 million), including confiscation of illegal gains and fines, and proposed a personal fine of RMB 1.25 million (approximately USD 183,575) against CEO Leaf Hua Li.

On May 28, 2026, Futu reported first quarter 2026 financial results that reflected the impact of the proposed CSRC penalties. The company disclosed that the proposed penalties comprised confiscation of illegal gains of approximately RMB 470 million and imposition of fines of approximately RMB 1.38 billion, aggregating approximately RMB 1.85 billion. These charges were recorded under "Others, net" in the company's statements of comprehensive income. On June 4, 2026, Business Times reported that Futu would halt services for opening or adding to positions and transferring funds into accounts for mainland Chinese investors beginning June 12, 2026, in order to comply with the CSRC's directive to wind down illegal activities within a two-year period. According to the complaint, these disclosures contradicted defendants' prior characterization of regulatory risk as uncertain and speculative and revealed that the CSRC had stated certain Futu entities conducted regulated business in mainland China without the required licenses or approvals.

Market Reaction

Futu's stock price reacted sharply to the disclosure of the CSRC crackdown and proposed penalties. On May 22, 2026, FUTU shares fell $34.10, or 27.5%, to close at $89.76 per share on unusually heavy trading volume. This represented a dramatic decline from the stock's Class Period high of $199.04 per share, reached on October 31, 2025. A second decline followed on May 28, 2026, when FUTU fell an additional $5.31, or 4.8%, to close at $104.91 per share on unusually heavy trading volume, after the company's Q1 2026 earnings release quantified the financial impact of the proposed penalties on its results.

Next Steps

● Lead Plaintiff Deadline: August 25, 2026

● After the lead plaintiff deadline, the Court will consider any lead plaintiff motions.

● Defendants may file a motion to dismiss.

● If the case proceeds, the Court may later consider class certification.

Disclaimer: This shareholder alert is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for personalized guidance. No specific outcomes are guaranteed.

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Step 2 of 3

Certification of Plaintiff Pursuant to Federal Securities Laws

I, duly certify and say, as to the claims asserted under the federal securities laws, that:

I have reviewed a complaint filed in the action.
I did not purchase the security that is the subject of this action at the direction of plaintiff's counsel or in order to participate in this action.
I am willing to serve as a representative party on behalf of the class, including providing testimony at deposition and trial, if necessary.
My transaction(s) in Futu Holdings Limited which are the subject of this litigation during the class period set forth in the complaint are set forth in the chart attached hereto.
Within the last 3 years,
I have not sought to serve nor have I served as a class representative in any federal securities fraud case. I have sought to serve as a class representative in
I will not accept any payment for serving as a representative party on behalf of the class beyond the Plaintiff's pro rata share of any recovery, except as ordered or approved by the court, including any award for reasonable costs and expenses (including lost wages) directly relating to the representation of the class.

Are you US Citizen?

Yes. I certify under penalty of perjury that the foregoing is true and correct. Executed this No. I certify under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed this

Clear

Signed pursuant to California Civil Code Section 1633.1, et seq. - and the Uniform Electronic Transactions Act as adopted by the various states and territories of the United States.

By your signature above, you confirm that have retained Levi & Korsinsky, LLP to represent you and the shareholder class as a lead plaintiff in the pending class action against Futu Holdings Limited. This representation will be on a contingency basis, meaning that Levi & Korsinsky will advance all expenses in the litigation and will only seek compensation and/or reimbursement of expenses if the firm obtains a recovery. Regardless of the result, we will never ask you to directly pay for any attorneys’ fees, expenses, or costs. Should we obtain a favorable result, we may ask the court to award us compensation and reimbursement of expenses to be paid by the defendants or as a portion of any class recovery. In exchange for our representation, you agree to cooperate as our client by providing, for example, relevant documents and deposition testimony, if necessary. During the course of this litigation, we may employ and/or work with other law firms, experts, and third-parties to successfully prosecute this action. If you are not appointed as the lead plaintiff or Levi & Korsinsky is not appointed as lead counsel, we will notify you of such decision at which time this representation will end unless otherwise extended by you and the firm. We look forward to working with you towards a successful resolution of this action.

I have reviewed the complaint linked in paragraph 1