Someone knew what was coming. That’s the core allegation in a federal lawsuit filed by Susquehanna International Group, one of the largest market-making firms in the world, against 100 unidentified defendants accused of using insider knowledge about a Chinese regulatory crackdown to pocket more than $100 million in options profits.

Susquehanna, which was on the losing side of those trades as the market maker, says it absorbed more than $70 million in losses. The firm filed the suit on June 29 in Manhattan federal court.

The trades that raised every red flag

In the two weeks leading up to May 22, 2026, a group of traders purchased roughly $12 million in short-dated put options on shares of Futu Holdings and Up Fintech, the company behind Tiger Brokers. Put options are essentially bets that a stock’s price will fall, and short-dated ones are particularly aggressive. They expire quickly, which means if you’re wrong, you lose everything.

On May 22, Beijing announced a sweeping crackdown on unlicensed cross-border securities services. Futu was hit with a fine of 1.85 billion yuan, roughly $272 million. Both Futu and Tiger Brokers saw their share prices crater.

The put options that cost $12 million suddenly became worth more than $100 million. That’s a return north of 900%.

Following the paper trail

The lawsuit targets 100 John Doe defendants, a legal mechanism used when the identities of the accused aren’t yet known. The court has already authorized the firm to issue subpoenas to several brokerages, including Interactive Brokers, Futu itself, and Tiger Brokers.

Both the Department of Justice and the Securities and Exchange Commission reportedly launched investigations into the trades in early July 2026.

Why this matters beyond Wall Street

Susquehanna’s lawsuit highlights a structural vulnerability in how market makers absorb risk. When someone trades on material non-public information, the market maker on the other side of the trade prices options based on available public information and gets steamrolled when the news drops. Susquehanna’s $70 million loss is a direct illustration of that dynamic.

What investors should watch

For investors holding positions in Futu, Tiger Brokers, or similar US-listed Chinese financial firms, the $272 million fine levied against Futu signals that China’s appetite for reining in cross-border financial services remains strong.

The subpoena process will be the most important near-term development. If Susquehanna can identify the traders behind these accounts, the case moves from a John Doe mystery into a concrete enforcement action. The involvement of the DOJ suggests criminal charges could follow the civil suit.