Someone knew what was coming. That’s the core allegation from Susquehanna International Group, one of the largest trading firms in the world, which claims a group of mystery traders used inside information about a Chinese regulatory crackdown to make over $100 million in profit. Susquehanna, left holding the bag as a market maker on the other side of those trades, says it lost more than $70 million.

Now the Justice Department and the SEC are both taking a hard look at what happened.

The setup and the sting

Here’s the story in plain English. On May 22, 2026, Chinese authorities announced a crackdown on cross-border brokerage services. The move hammered US-listed shares of Chinese brokerages Futu Holdings and UP Fintech, better known as Tiger Brokers.

But in the days leading up to that announcement, someone went on a shopping spree for short-dated put options on both stocks. Put options are essentially bets that a stock’s price will fall, and short-dated ones are particularly aggressive wagers, cheap if you’re wrong, wildly profitable if you’re right.

On June 29, Susquehanna filed a lawsuit in Manhattan federal court naming up to 100 “John Doe” defendants. The firm doesn’t know who the traders are yet, which is precisely the point of the legal action. Susquehanna is seeking judicial permission to subpoena brokerages, including Interactive Brokers, where it believes the suspicious trades were executed, to unmask the account holders behind the positions.

The firm also wants those accounts frozen to prevent the profits from disappearing before any legal resolution.

Why regulators are paying attention

The SEC confirmed it is reviewing the trades referenced in Susquehanna’s complaint as of July 2. The Justice Department has also opened its own investigation into the allegations.

The scale is what makes this particularly notable. Over $100 million in alleged profits from a single regulatory event is not a rounding error.

The cross-border element adds a layer of complexity. The regulatory action originated in China. The trades were executed in US markets. The traders’ identities are unknown.

What this means for investors

For anyone trading US-listed Chinese stocks or their derivatives, this case is a flashing yellow light. The allegation that insiders are trading ahead of regulatory decisions introduces a dimension of uncertainty beyond whether a crackdown will happen. You’re potentially competing against people who already know the answer.

Investors should watch for whether the subpoenas to Interactive Brokers yield usable information, and whether any of the 100 unnamed defendants turn out to be connected to Chinese government officials or regulatory bodies.