During a hearing in Manhattan federal court, a judge cast doubt on Susquehanna International Group's lawsuit alleging $100 million in insider trading. The judge questioned whether Susquehanna, a market maker that facilitates trades, truly suffered damages by taking the opposite side of trades in options on Chinese cross-border brokerages. The judge suggested Susquehanna might be attempting to recoup losses from a legitimate but unprofitable trade, rather than being a victim of insider trading.
Susquehanna had sued 100 anonymous defendants, claiming they made $100 million by trading on inside information about an impending Chinese government crackdown on cross-border brokerages in May. The firm stated it lost more than $70 million as the counterparty to these trades. Despite the judge's skepticism, Susquehanna has already secured a court order to freeze brokerage accounts linked to the alleged scheme and to subpoena brokers to identify the account holders.
The Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) have also initiated probes into the alleged insider trading scheme, following Susquehanna's claims. These investigations are currently in their early stages. The judge's comments introduce a new layer of complexity to the ongoing legal and regulatory scrutiny surrounding these significant allegations, potentially impacting the direction and outcome of Susquehanna's civil suit.
