Futu Holdings Ltd.‘s (NASDAQ:FUTU) stock plummeted on Friday following news of an investigation and massive proposed penalties by Chinese regulators, striking a blow to the digital brokerage.
Unlicensed Trading Operations
Shares of Futu Holdings, the online financial services giant behind the popular Moomoo and Futubull trading platforms, crashed nearly 28% on the Nasdaq.
The stock closed near its 52-week low of $80.50, at $89.76, after the Hong Kong-headquartered company disclosed it had "received a Notice of Investigation and an Administrative Penalty Pre-Notification Letter" from the China Securities Regulatory Commission (CSRC) regarding its mainland operations.
According to the CSRC, in a press release issued by Futu, its entities "without obtaining the requisite licenses or approval, conducted securities business, public fund sales business and futures business in mainland China in violation of the Securities Law, the Securities Investment Fund Law and the Futures and Derivatives Law of the People's Republic of China."
Consequently, the CSRC proposed "to order the related companies to rectify or cease such activities, confiscate illegal gains, and impose fines" totaling roughly 1.85 billion yuan, or approximately $271 million.
Executive Impact And Global Expansion
The regulatory net also targets Futu's founder and CEO, Chinese billionaire Li Hua, with the CSRC proposing a personal fine of $183,575.
Futu noted the penalties are subject to final calculation and affirmed it will fully cooperate with authorities, adding that business outside mainland China remains normal. Benzinga reached out for a comment but did not get an immediate response.
Despite the severe domestic roadblock, the company still maintains a $12.55 billion market capitalization and boasts 29 million global users.
Futu continues to expand into international markets like Malaysia and Singapore, directly competing with U.S. brokers such as Robinhood Markets Inc. (NASDAQ:HOOD) and E-Trade. Investors will be closely watching for anyfurther signals when Futu posts its latest quarterly earnings results on Thursday.
How Has FUTU Performed In 2026?
In comparison with the Nasdaq Composite’s 13.38% year-to-date advance, shares of FUTU have dropped 45.69% over the same period. It closed 27.53% lower on Thursday at $89.76 per share.
Over the last month, FUTU stock was down 43.86%, and it fell 46.67% and 19.69% over the last six months and the year, respectively. Benzinga’s Edge Stock Rankings indicate that FUTU maintains a weak price trend in the medium, short, and long terms, with a solid growth ranking.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Zakharchuk / Shutterstock
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