Svmuu News: According to sources familiar with the matter, U.S. regulators are investigating allegations raised by Susquehanna International Group. The allegations claim that an unknown insider trader profited $100 million through options bets ahead of China’s recent regulatory crackdown on cross-border brokerage firms Futu and Tiger Securities. Susquehanna disclosed these allegations in a lawsuit filed on June 29 in federal court in Manhattan.
Sources said the U.S. Securities and Exchange Commission (SEC) is reviewing the trades described in the market maker’s complaint. In the lawsuit, Susquehanna claims it lost more than $70 million as the counterparty to most of the alleged insider trading transactions. The lawsuit states that traders purchased options traded on U.S. exchanges for Chinese securities firms, which subsequently became the targets of the May 22 regulatory crackdown. The scope and stage of the SEC’s investigation remain unclear at this time. On June 29, a U.S. judge approved Susquehanna’s request to freeze the relevant accounts. The Chinese government stated that Futu and Tiger Securities provided unlicensed trading services to mainland residents. Shares of both companies fell following the May 22 announcement. Futu was fined 1.85 billion yuan by regulators, and founder Leaf Li saw his net worth drop by $1.7 billion in a single day. (straitstimes)