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.
