Important Information Regarding Section 20(a) Individual Liability Claims Against Futu Holdings Executives Who Certified SEC Filings While the Company Allegedly Operated Without Required CSRC Licenses
NEW YORK, Aug. 19, 2026 /PRNewswire/ -- Levi & Korsinsky, LLP alerts investors in Futu Holdings Limited (NASDAQ: FUTU) of a pending securities class action naming two senior executives as individual defendants. 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 shares lost $34.10 per share on May 22, 2026, a 27.5% single-day decline, after the CSRC proposed a penalty of RMB 1.85 billion (approximately USD 271 million). The Court has set August 25, 2026 as the deadline to apply for lead plaintiff appointment.
The Named Individual Defendants
Leaf Hua Li, Futu's Chief Executive Officer, and Arthur Yu Chen, the Company's Chief Financial Officer, are named as individual defendants in the action. The complaint charges that both executives possessed the power and authority to control the contents of Futu's SEC filings, press releases, and presentations to analysts and institutional investors throughout the three-year Class Period. The CSRC also proposed a personal fine of RMB 1.25 million against Li individually.
Section 20(a) Control Person Framework
The lawsuit asserts claims under Section 20(a) of the Securities Exchange Act of 1934, which imposes liability on individuals who controlled a company that violated Section 10(b). As alleged, Li and Chen:
- Received copies of the Company's reports and press releases prior to issuance and had the ability to prevent their release or cause corrections
- Possessed access to material non-public information regarding CSRC non-compliance and the risk of substantial penalties
- Signed annual reports on Form 20-F that affirmed financial results allegedly inflated by revenue from unlicensed mainland China operations
- Knew that adverse facts regarding ongoing regulatory exposure had not been disclosed to the investing public
Sarbanes-Oxley Certification Obligations
Under Sections 302 and 906 of the Sarbanes-Oxley Act, Li and Chen each personally certified the accuracy and completeness of Futu's annual reports filed with the SEC. The action contends these certifications were materially misleading because they failed to disclose that Futu continued conducting securities, public fund sales, and futures business in mainland China without required licenses or CSRC approval, even after the regulator's December 2022 public warning.
"Corporate officers have a duty to ensure their companies' public statements are accurate and complete. When executives certify SEC filings, they assume personal responsibility for the truthfulness of those disclosures."Â -- Joseph E. Levi, Esq.
Scienter Allegations
The complaint charges that the Individual Defendants knew Futu was not in compliance with CSRC requirements. The CSRC publicly announced its inquiry on December 30, 2022. Yet for over three years, the Company's quarterly press releases continued to tout paying client growth, total client assets exceeding HK$829 billion, and trading volumes surpassing HK$3.2 trillion per quarter, all without adequately disclosing that the underlying business generating these figures was operating without requisite licenses.
Speak with an attorney about recovering damages or call Joseph E. Levi, Esq. at (212) 363-7500.
Levi & Korsinsky, LLP | Top 50 Securities Firm | (212) 363-7500 | www.zlk.com | Attorney Advertising. Prior results do not guarantee similar outcomes.
Frequently Asked Questions About the FUTU Lawsuit
Q: Who are the defendants named in the FUTU lawsuit? A: The complaint names Futu Holdings Limited and individual defendants Leaf Hua Li (CEO) and Arthur Yu Chen (CFO), who signed SEC filings and certified financial disclosures under Sarbanes-Oxley throughout the Class Period.
Q: What is the FUTU class action lawsuit about? A: A securities class action has been filed against Futu Holdings Limited (NASDAQ: FUTU) alleging materially false and misleading statements between May 24, 2023 and May 27, 2026. Shares fell approximately 27.5% after the CSRC proposed a RMB 1.85 billion penalty for unlicensed operations, causing significant losses for shareholders.
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: How do I know if I lost enough money to be the lead plaintiff? A: There is no minimum loss threshold. Courts appoint the investor with the largest provable loss who is willing and able to represent the class adequately. Contact Levi & Korsinsky before August 25, 2026 to evaluate.
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: Do I need to go to court or give testimony? A: No. The overwhelming majority of class members never appear in court or give depositions. You submit a claim form to receive your portion of recovery.
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.
CONTACT:
Levi & Korsinsky, LLP
Joseph E. Levi, Esq.
Ed Korsinsky, Esq.
33 Whitehall Street, 27th Floor
New York, NY 10004
Tel: (212) 363-7500
Fax: (212) 363-7171
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SOURCE Levi & Korsinsky, LLP
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