The legal action centers on accusations that the brokerage firm continued to solicit mainland Chinese clients without necessary approvals from the China Securities Regulatory Commission (CSRC). While the company touted significant growth in client assets—which expanded from HK$465.5 billion to HK$973.9 billion—the lawsuit contends these metrics were built on a business model that regulators had explicitly flagged as non-compliant. Despite the removal of the Futubull app from Chinese stores in 2023, the complaint alleges the company maintained its illicit operations, ultimately leading to a proposed RMB 1.85 billion penalty.

Futu’s financial health took a direct hit when it was forced to account for the proposed fines, which contributed to a reduced first-quarter 2026 net income of HK$831 million. The suit, spearheaded by Levi & Korsinsky LLP, aims to recover damages for shareholders who were allegedly misled regarding the sustainability of the company's revenue streams. Investors seeking lead plaintiff status must file by August 25, 2026. Participation in the action does not require upfront out-of-pocket fees, as the case proceeds on a contingency basis.