SEC Investigates Susquehanna’s Claims of Insider Trading Ahead of China’s Crackdown on Cross-Border Brokerages
The U.S. Securities and Exchange Commission has launched an investigation into claims by Susquehanna International Group that unnamed insiders made roughly $100 million by trading options in the days leading up to China’s recent regulatory clampdown on cross‑border brokerages, according to a person familiar with the matter.
Susquehanna, a Pennsylvania‑based market‑making giant, went public with its accusations on Monday in a lawsuit filed in Manhattan federal court. The firm alleges that the traders bought U.S. exchange‑traded options on Chinese securities firms that were later targeted by Beijing on May 22. As the counterparty on most of those trades, Susquehanna says it lost more than $70 million.
The SEC’s examination is at an early stage, and the scope of the probe remains unclear. Such reviews sometimes conclude without any enforcement action. An SEC spokesperson declined to comment.
In its complaint, Susquehanna named 100 John Doe defendants, acknowledging it does not know who executed the trades but arguing that the “high risk, high reward” nature of the options positions could only plausibly be explained as insider trading. The firm suspects the tip may have come from Chinese regulatory staff or employees at the targeted brokerages.
On Monday, a federal judge granted Susquehanna’s request to freeze accounts at Interactive Brokers Group Inc., as well as at the platforms of Futu Holdings Ltd. and Up Fintech Holdings Ltd. (which operates Tiger Brokers) — the same firms that Susquehanna alleges were used to place the trades. The judge also authorized subpoenas requiring those firms to reveal the account holders’ identities.
Futu and Tiger Brokers were among the brokerages singled out by Chinese authorities, who accused them of offering unlicensed trading services to mainland Chinese residents. Following the May 22 announcement, shares of both companies plummeted. Futu was hit with a $272 million regulatory penalty, and its founder, Leaf Li, saw his fortune drop by $1.7 billion in a single day.
An Interactive Brokers spokesperson said the firm had already been cooperating with Susquehanna, including freezing the relevant accounts, and would continue to cooperate with regulators as inquiries arise.
Susquehanna’s lawsuit details that the alleged insiders spent only about $12 million to generate at least $100 million in profit, suggesting they had access to non‑public information about the impending crackdown. The firm is active across options, stocks, energy, bonds and foreign exchange markets, and reported equity positions totaling more than $893 billion in the first quarter, according to an SEC filing. The firm’s co‑founder, Jeff Yass, is one of the world’s wealthiest individuals, with an estimated net worth of $93 billion, according to the Bloomberg Billionaires Index.
The Chinese government’s May 22 directive — issued jointly by eight regulators including the China Securities Regulatory Commission, the central bank and the ministry of public security — warned that it would punish firms helping mainland clients illegally invest abroad. The crackdown has sent shockwaves through the U.S.‑listed Chinese brokerage sector and raised new questions about cross‑border regulatory enforcement.
©2026 Bloomberg L.P. This article has been edited for clarity and style.