Time-Sensitive: Allegations Focus on Futu Holdings' Failure to Disclose CSRC Non-Compliance That Allegedly Overstated Financial Results by Hundreds of Millions
NEW YORK, July 8, 2026 /PRNewswire/ -- Levi & Korsinsky, LLP alerts investors in Futu Holdings Limited (NASDAQ: FUTU) of a pending securities class action. Class Period: May 24, 2023 through May 27, 2026. Check if you can recover your investment losses or contact Joseph E. Levi, Esq. at jlevi@levikorsinsky.com | (212) 363-7500.
Futu shareholders lost $34.10 per share when the stock fell 27.5% on May 22, 2026, after Reuters reported a sweeping CSRC crackdown on brokers illegally facilitating cross-border capital flows. The Court has set August 25, 2026 as the deadline to apply for lead plaintiff appointment.
How Alleged CSRC Non-Compliance Tainted Reported Financial Results
The lawsuit asserts that Futu continued conducting securities, public fund sales, and futures business in mainland China without required licenses throughout the three-year Class Period. During this time, the Company reported rapid growth in paying clients, rising from 1,528,103 in Q1 2023 to over 2.8 million by mid-2025, and total client assets expanding from HK 465.5 billion to nearly HK 974 billion. The action claims these headline figures were materially misleading because they incorporated revenue and client metrics derived from business the Company was not authorized to conduct.
The proposed CSRC penalty confirms the scale: RMB 470 million in alleged illegal gains subject to confiscation, plus RMB 1.38 billion in fines, totaling approximately USD 271 million. As alleged, those illegal gains flowed directly into the financial results that management touted to investors each quarter.
Regulatory Compliance Representations in SEC Filings
In its FY2023 20-F, the Company told investors it had "taken and may continue to take rectification measures" and that it had "limited information to accurately predict if any disciplinary action or punishment will be taken." The lawsuit contends these disclosures were misleading because they framed regulatory risk as speculative when, as alleged, the Company was actively operating in violation of CSRC requirements and knew the business generating its growth metrics lacked proper authorization.
- The Company removed its Futubull app from Chinese app stores in May 2023 but allegedly continued servicing existing mainland accounts
- Quarterly earnings releases throughout 2023, 2024, and into 2025 allegedly included revenue from unauthorized mainland operations
- SEC filings framed potential penalties as hypothetical while the Company allegedly knew its rectification measures were insufficient
- The RMB 1.85 billion proposed penalty amounts to approximately USD 271 million, compared to Futu's full-year 2023 net income of HK$4.28 billion (approximately USD 548 million)
Speak with an attorney about recovering damages or call (212) 363-7500.
"Investors deserve transparency about material risks that could affect their investments. When a company's growth metrics are built on business it is not authorized to conduct, the resulting financial statements may not reflect the true economic picture available to shareholders," stated Joseph E. Levi, Esq.
Why Disclosure Adequacy Allegedly Matters to FUTU Investors
The gap between what management disclosed and what allegedly was happening is central to this action. Each quarter, the Company reported paying client growth, total client assets, and trading volumes without separating metrics attributable to authorized versus unauthorized operations. As claimed in the filing, investors had no way to assess what portion of the Company's reported financial performance depended on business that could be unwound by regulators at any time.
When the CSRC Notification Letter arrived on May 22, 2026, the market repriced FUTU shares immediately, erasing 34.10 per share in a single session. A second decline of 5.31 per share followed on May 28 when Q1 2026 results reflected the penalty's impact on net income.
Speak with an attorney about recovering damages or contact Joseph E. Levi, Esq. at jlevi@levikorsinsky.com or (212) 363-7500.
ABOUT LEVI & KORSINSKY, LLP — Over the past 20 years, Levi & Korsinsky has secured hundreds of millions of dollars for aggrieved shareholders. The firm has extensive expertise in complex securities litigation and a team of over 70 employees. For seven consecutive years, Levi & Korsinsky has ranked in ISS Securities Class Action Services' Top 50 Report. Investors who suffered losses have until August 25, 2026 to seek appointment as lead plaintiff. Attorney Advertising. Prior results do not guarantee similar outcomes.
Frequently Asked Questions About the FUTU Lawsuit
Q: Who is eligible to join the FUTU investor lawsuit? A: Investors who purchased FUTU stock or securities between May 24, 2023 and May 27, 2026 and suffered financial losses may be eligible. Eligibility is based on purchase date and documented losses, not on whether you still hold the shares.
Q: How much did FUTU stock drop? A: Shares fell approximately 27.5%, a decline of $34.10 per share, after the company disclosed receipt of a CSRC Notification Letter proposing RMB 1.85 billion in penalties for unauthorized cross-border securities operations. A further 4.8% decline followed days later when Q1 2026 earnings reflected the penalty impact.
Q: What specific misstatements does the FUTU lawsuit allege? A: The complaint alleges Futu Holdings made materially false or misleading statements regarding its regulatory compliance status and the sustainability of financial results that included revenue from unauthorized mainland China operations. When the true state was revealed, the stock price declined sharply.
Q: What do FUTU investors need to do right now? A: Gather brokerage records including purchase dates, share quantities, and prices paid. Contact Levi & Korsinsky for a free, no-obligation evaluation at jlevi@levikorsinsky.com or (212) 363-7500. No immediate action is required to remain eligible as a class member.
Q: What is a lead plaintiff and why does it matter? A: A lead plaintiff is the investor appointed by the court to represent the entire class. Lead plaintiffs are typically investors with the largest documented losses. Being appointed does not increase individual recovery but gives direct oversight of how the case is run.
Q: What if I already sold my FUTU shares -- can I still recover losses? A: Yes. Eligibility is based on when you purchased, not whether you still hold them. Investors who bought during the class period and sold at a loss may still participate.
Q: What does it cost me to participate? A: Nothing. Securities class actions are handled on a pure contingency basis. No upfront fees, no retainer, no out-of-pocket costs.
Q: What if I missed the lead plaintiff deadline? A: The deadline applies only to investors seeking lead plaintiff appointment. Class members who miss it can still participate in any settlement or recovery.
CONTACT:
Levi & Korsinsky, LLP
Joseph E. Levi, Esq.
Ed Korsinsky, Esq.
33 Whitehall Street, 27th Floor
New York, NY 10004
jlevi@levikorsinsky.com
Tel: (212) 363-7500
Fax: (212) 363-7171
View original content to download multimedia:https://www.prnewswire.com/news-releases/futu-upcoming-deadline-levi--korsinsky-alerts-futu-holdings-limited-stockholders-of-securities-class-action---contact-the-firm-302819323.html
SOURCE Levi & Korsinsky, LLP
