According to the lawsuit, Futu and its senior management failed to disclose to investors that: (1) Futu was operating illegally in China as a result of its failure to obtain the proper licenses; (2) Futu was engaging in unlawful activity and instead falsely characterized the applicable Chinese laws as ambiguous; and (3) the foregoing subjected Futu to a heightened risk of regulatory enforcement.

On December 30, 2022, The Wall Street Journal released an article entitled “China Regulator Says Futu, UP Fintech Violated Laws”, which discussed, among other things, how Chinese regulators had warned Futu in 2021 that Futu was flouting Chinese securities laws.

Following this news, the price of Futu American Depositary Shares (“ADSs”) dropped by $18.26 per ADS, or 31%, to close at $40.65 on December 30, 2022.

Then, on May 16, 2023, during market hours, Reuters released an article entitled “Two online brokerages to remove China apps as Beijing data crackdown widens”.

Following this news, the price of Futu ADSs declined $1.91 per ADS, or 4.4%, to close at $41.24 on May 16, 2023.

Investors who purchased or acquired Futu securities between April 27, 2020 and May 16, 2023, may no later than August 11, 2023, seek to be appointed as a lead plaintiff representative of the class.