The legal action covers the period between May 24, 2023, and May 27, 2026. Plaintiffs argue that while Futu’s SEC filings framed potential CSRC sanctions as hypothetical, the company was actively conducting unauthorized securities, fund sales, and futures business. This discrepancy came to a head on May 22, 2026, when Futu shares plummeted 27.5%—a loss of $34.10 per share—following the disclosure of a proposed RMB 1.85 billion penalty.

According to the complaint, Futu’s financial results during the class period were inflated by revenue from operations that the China Securities Regulatory Commission had already flagged as non-compliant. Although the company acknowledged an ongoing inquiry in its annual reports, it maintained that its rectification measures were in progress. Attorneys for the plaintiffs contend that these disclosures were insufficient, as the company failed to clarify that the underlying activities triggering the regulatory scrutiny remained active. Investors seeking to participate in the litigation have until August 25, 2026, to file for lead plaintiff status.