Susquehanna Sues One Hundred John Does Over $100 Million Options Windfall Before China Crackdown News
Susquehanna Securities, LLC and Susquehanna Investment Group, members of one of the world's largest options trading firms, have filed suit in the United States District Court for the Southern District of New York against one hundred unidentified John Doe defendants, alleging an insider trading scheme that the complaint says produced more than $100 million in illicit profits in a matter of weeks. The complaint, No. 1:26-cv-05474 (filed June 29, 2026), asserts claims under Section 10(b) of the Securities Exchange Act and Section 20A, which gives traders a private right of action against insider traders who transacted contemporaneously, along with a New York unjust enrichment claim seeking disgorgement, restitution, and an equitable accounting.
According to the complaint, in the two weeks before a May 22, 2026 public announcement of a Chinese government crackdown on cross-border trading platforms, the defendants purchased more than 200,000 short-dated put options on United States exchanges in the stock of two such platforms: Futu Holdings Limited (Nasdaq: FUTU) and UP Fintech Holding Ltd, which operates as Tiger Brokers in Asia. The complaint alleges the positions cost approximately $12 million and yielded a profit of over $100 million, a return exceeding 900 percent.
How the Alleged Trades Worked
The complaint walks through the mechanics with unusual specificity. A put option gives its holder the right to sell stock at a set strike price within a set period, and the complaint defines "short dated" options as those expiring less than 30 days from purchase, the riskiest and cheapest way to bet on an imminent decline. It alleges that between May 7 and May 21, 2026, market orders for short-dated FUTU and TIGR puts increased significantly, and that the buying was not evenly distributed over the period. One illustration from the complaint: with FUTU opening at $81.08 on May 22 after the news, the holder of a put struck at $102.45 that had cost $1.50 could capture roughly $19.87 per share. Another table row describes TIGR puts expiring May 29, 2026 with a $5 strike.
The news landed in the early morning of May 22, 2026. Reuters reported at approximately 4:33 a.m. Eastern time that Chinese authorities would crack down on illegal cross-border securities activity, and both Futu and UP Fintech announced that they had received enforcement notices from the China Securities Regulatory Commission concerning their operations in China; Futu's announcement was filed publicly with the SEC at approximately 9:35 a.m. that morning. The companies' shares plunged, and the freshly purchased puts paid out.
A Market Maker as Insider Trading Plaintiff
Insider trading enforcement is usually the province of the SEC and federal prosecutors, and suits against unidentified traders are a familiar SEC device when suspicious foreign trading precedes market-moving news. The Susquehanna complaint illustrates the private-action counterpart. As options market makers, the Susquehanna entities allege they were the sellers on a substantial number of the defendants' purchases, including trades that generated approximately $71 million of the defendants' profits. That counterparty position is what makes them "contemporaneous traders" with standing to sue under Section 20A, codified at 15 U.S.C. § 78t-1, and it is why the prayer for relief demands damages of no less than $71.4 million plus disgorgement of all profits.
Because the defendants are anonymous, the complaint builds its scienter case circumstantially: it alleges that the timing, size, type, and pattern of the trading, and the absence of any plausible alternative explanation, provide strong evidence that the purchases were made on material nonpublic information about the coming Chinese enforcement action, in breach of a duty of trust and confidence. The complaint notes that the plaintiffs do not yet know how many accounts participated in the trades.
What Comes Next
The immediate work of the case is identification. Every options trade clears through regulated intermediaries, and the plaintiffs are expected to pursue discovery into clearing, brokerage, and account records associated with the put purchases to put names on the John Does, the same paper trail the SEC follows in its own unknown-trader actions. Foreign-based defendants may contest personal jurisdiction once identified, but the complaint emphasizes that the options traded on United States exchanges, including the NASDAQ Options Market.
For market participants, the suit is a reminder that the counterparty to an anonymous windfall is often a sophisticated firm with the resources and incentive to reconstruct it. The complaint was filed by one of the most active options market-making organizations in the country, and its damages theory prices exactly what the alleged scheme cost the firm that took the other side. No defendant has appeared in the action.
Questions about this topic: david@newmanbrunk.com