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id: 528, Created by Stan Vick, Scout
China’s Regulator FUTU Investigation of Domestic Laws Violation Case
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D. New JerseyCourt
- China’s securities regulator reported that FUTU violated its domestic laws.
- $FUTU plunged 31% and lost $2.5 billion of its capitalization.
- Investors suspect FUTU & its Leaders of misleading and misconduct.
On December 30, 2022, China’s securities regulator (CSRC) reported that Futu Holdings (NASDAQ: FUTU) violated its domestic laws by allowing customers on the mainland to make cross-border trades.
On this news, FUTU's shares plunged 31% and the Company lost over $2.5 billion of its capitalization, seriously damaging investors.
- As wrote the WSJ, The regulator also said it was requiring Futu to stop taking on or soliciting new domestic clients and customers, who aren’t allowed to open accounts.
- The CSRC said it intends to dispatch officers to conduct on-site inspections on Futu.
- The Company said in a statement that it will cooperate fully with the CSRC and take all necessary measures to comply with China’s laws and regulations.
Now, FUTU holders have all reasons to suspect that the Company, its Leaders, and its Service Providers grossly violated their investor rights, which led to material damages to the value of the securities positions.
Specifically, the Company and its Leaders made false and/or misleading statements and/or failed to disclose, among other things, that:
- Futu’s business was, quite simply, illegal as it related to operations in China as a result of its failure to obtain the proper licenses;
- it did not fully disclose to investors that it was engaging in an unlawful activity and instead falsely characterized the applicable Chinese laws as ambiguous;
- the foregoing subjected the Company to a heightened risk of regulatory enforcement; and
- as a result, Defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.
When the true details entered the market, the lawsuit claims that investors suffered damages.
Failure to Disclose,
Depository Securities (ADS, ADR, GDR)
Shock Event Date
30 December 2022
12 June 2023
Lead Plaintiff Deadline
11 August 2023