Key Takeaways
Law firm Block & Leviton announced an investigation into UP Fintech Holding Ltd. (NASDAQ: TIGR) after the stock plunged over 20% on news of a Chinese regulatory crackdown on cross-border securities trading.
"UP Fintech could face administrative penalties and confiscation of alleged illegal income tied to activities conducted by its subsidiaries," regulators stated, according to a press release from the law firm investigating the potential securities law violations.
The investigation follows an announcement from the China Securities Regulatory Commission that it would penalize UP Fintech’s Tiger Brokers, Futu Holdings Ltd. (NASDAQ: FUTU), and Longbridge Securities Ltd. for operating on the mainland without a license. In response to the news, UP Fintech shares fell as much as 23% in Friday trading, while US-listed shares in Futu tumbled 35%, according to Bloomberg reports.
The move marks a significant escalation in a multi-year campaign against illicit cross-border brokerages, putting billions of dollars in trades from mainland clients at risk. Block & Leviton is now seeking investors who have lost money to learn more about how they might recover those losses.
The regulatory action intends to confiscate all “illegal gains” from the firms and impose severe penalties. Investors who purchased UP Fintech common stock and have seen their shares fall may be eligible to participate in the investigation.
The investigation and regulatory penalties create significant uncertainty for UP Fintech's future revenue from mainland clients. Investors will be watching for the official penalties from the China Securities Regulatory Commission and the outcome of the shareholder investigation.
This article is for informational purposes only and does not constitute investment advice.
