The legal scrutiny follows a May 22, 2026, announcement from Chinese regulators targeting brokers operating without onshore licenses. Reuters reported that authorities intend to penalize firms, including Tiger, Longbridge, and Futu, for facilitating illegal cross-border capital flows. The news triggered an immediate market reaction, with Futu ADSs dropping 27.5% in a single session.

Rosen Law Firm, which specializes in shareholder derivative litigation, claims that Futu may have provided materially misleading business information to the public prior to the crackdown. The firm is currently building a case to seek compensation for affected investors on a contingency fee basis. Shareholders interested in participating in the potential litigation are directed to register through the firm's website or contact Phillip Kim directly.