Futu Holdings, a Hong Kong-based online financial services firm, said China’s securities regulator is investigating its operations in mainland China.

Its Nasdaq-listed shares fell nearly 28% on May 22.

The China Securities Regulatory Commission (CSRC) said certain Futu entities in mainland China and Hong Kong carried out securities business, public fund sales, and futures business in mainland China without the required licenses or approval.

It proposed penalties including orders to rectify or stop those activities, confiscation of illegal gains, and fines of about 1.9 billion yuan (US$272 million).

Futu said its founder and CEO Li Hua also faces a proposed personal fine of 1.3 million yuan (US$184,000).

The company said the penalties remain subject to further proceedings and final calculation by the CSRC, and that its business outside mainland China continues to operate normally.

The case comes follows a broader crackdown on offshore brokers serving mainland investors.

The CSRC has also penalised Tiger Brokers and Long Bridge, and said Futu’s Hong Kong unit marketed trading services and processed trading instructions in mainland China without mainland licenses.

🔗 Source: Forbes