Susquehanna Investment Group has filed a lawsuit in Manhattan federal court seeking to identify individuals who allegedly made at least $100 million by trading on insider information. The firm claims it lost over $70 million as the counterparty to these trades, which it believes constitute one of the largest insider-trading schemes in recent memory. The alleged scheme involved trading options ahead of a Chinese government crackdown on cross-border brokerages that occurred on May 22.
The trades involved put options that increased significantly in value after China's financial regulator announced that Futu Holdings Ltd and UP Fintech Holdings Ltd. were operating without proper licenses, causing a sharp decline in their Nasdaq-listed shares. Susquehanna stated that most of these suspicious trades were conducted through accounts at Interactive Brokers Group Inc, and the platforms of Futu Holdings Ltd and Up Fintech Holdings Ltd.
Susquehanna has since secured a court order to freeze brokerage accounts linked to the alleged $100 million insider-trading scheme and to subpoena the brokers for the identities of the account holders. This legal action aims to recover the more than $70 million lost by Susquehanna and uncover the 100 unnamed defendants responsible for these illicit gains. The alleged insider trading surpassed the monetary gains of the Galleon insider-trading case that led to Raj Rajaratnam's imprisonment.
