#United States #New York #Futu Holdings #Lei Hua Li #Arthur Yu Chen

Class Action Alert: Futu Holdings Investors

Levi & Korsinsky, LLP has issued an alert to investors of Futu Holdings Limited (NASDAQ: FUTU), regarding a pending class action lawsuit that involves significant concerns surrounding the company's operations. This class action names Leaf Hua Li, the Chief Executive Officer, and Arthur Yu Chen, the Chief Financial Officer, as individual defendants in light of serious allegations related to compliance failures with regulatory requirements. The lead plaintiff deadline is set for August 25, 2026.

Background of the Case

The lawsuit pertains to the time frame from May 24, 2023, to May 27, 2026, during which Futu Holdings faced allegations of securities violations. It was reported that the company's shares suffered a significant drop of $34.10, equating to a 27.5% decline on May 22, 2026. This steep fall came in the wake of the China Securities Regulatory Commission (CSRC) proposing a hefty penalty of RMB 1.85 billion, roughly $271 million, for the company's alleged unlicensed operations.

The Allegations

According to the complaint, Li and Chen assumed crucial roles in controlling the content shared in Futu's SEC filings, press releases, and financial presentations to investors, yet failed to disclose critical information related to non-compliance with CSRC regulations. This brought serious allegations that they knowingly inflated the company's financial performance based on revenue from unlicensed operations in mainland China. Moreover, the complaint indicates that Li could face a personal fine of RMB 1.25 million as part of the ongoing legal scrutiny.

Section 20(a) Claims

The lawsuit invokes Section 20(a) of the Securities Exchange Act of 1934, which holds individuals liable if they had control over a company that committed violations under Section 10(b). The allegations state that both defendants were aware of ongoing regulatory inquiries and maintained access to non-public information, yet continued to release favorable financial reports, which misled investors.

Certification Under Sarbanes-Oxley Act

Li and Chen certified the accuracy of annual reports submitted to the SEC, under Sections 302 and 906 of the Sarbanes-Oxley Act. However, these certifications are now contested as misleading, as they did not reveal that Futu was conducting business activities without the necessary licenses, despite warnings from the regulatory body.

Investors’ Rights and Actions

Investors who believe they may have suffered losses due to Futu's alleged misleading actions are encouraged to evaluate their options for recovering damages. If you acquired Futu shares during the class period or sold at a loss, you might still be eligible to participate in the lawsuit. There are no upfront fees or costs for involvement in this action as these securities class actions operate on a contingency basis.

Joseph E. Levi, an attorney at Levi & Korsinsky, assures that corporate officers are mandated to ensure that their disclosures to the investing public are accurate. They are held personally accountable for any certifications that mislead investors regarding the company's compliance status.

Frequently Asked Questions

Levi & Korsinsky has provided clarity on several pertinent questions surrounding this lawsuit:

• - Who are the defendants? The complaint involves Futu Holdings Limited, Leaf Hua Li (CEO), and Arthur Yu Chen (CFO).
• - What is this lawsuit about? It addresses alleged materially false and misleading statements related to unlicensed operations, with significant financial repercussions for shareholders.
• - How does the lead plaintiff process work? The investor with the greatest losses willing to lead the case will be appointed as the lead plaintiff, who oversees the lawsuit on behalf of the class.
• - What if I've already sold my shares? Eligibility is determined by your purchase timing, not by your current holdings.
• - Am I required to attend court? No, most class members will not be needed in court and can submit a claim form for recovery.

For affected investors looking to recover their losses, it is vital to act promptly and reach out to legal representatives before the upcoming deadline. Contact Joseph E. Levi at 212-363-7500 or email him at [email protected] for further information.