The SEC is investigating Insider Trading Case Involving Futu and Tiger Brokers, HIG Insider Accused of Profiting $100 Million

BlockBeats News, July 2nd, the U.S. Securities and Exchange Commission is investigating insider trading allegations brought by Hana International Group. In a lawsuit filed with the Manhattan federal court on June 29th, Hana International claimed that prior to the Chinese regulatory crackdown on cross-border brokers such as Futu and Tiger Securities on May 22nd, an unknown insider trader preemptively purchased China brokerages' US stock put options at a cost of around $12 million, gaining at least $100 million in profit. As the primary counterparties to these trades, Hana International lost over $70 million. On the same day, a federal judge approved the freezing of related accounts and allowed the subpoena of Interactive Brokers, Futu, and Tiger Securities' parent company Up Fintech to obtain the account holders' identities. Previously, Futu was fined 1.85 billion yuan in regulatory penalties, and founder Li Hua saw his wealth shrink by $1.7 billion in a single day.

The scope and stage of the SEC's investigation are currently unclear, and regulatory scrutiny may end without enforcement action, to which the SEC declined to comment on. Hana International sued 100 anonymous defendants, admitting ignorance of the traders' identities but arguing that such a "high-risk, high-reward" options bet can only reasonably be inferred as insider trading. Hana International is one of the world's leading market makers, with stock positions exceeding $893 billion in the first quarter, and co-founder Jeff Yass, with a net worth of $93 billion, ranks on the Bloomberg Billionaires Index.