Susquehanna hunts for traders who allegedly turned $12 million into $100 million on insider knowledge

Someone, or rather up to 100 someones, apparently knew what was coming. And they placed their bets accordingly.

Susquehanna International Group, one of the largest quantitative trading firms on the planet, filed a lawsuit in Manhattan federal court on June 29 against up to 100 unnamed “John Doe” defendants. The allegation: these traders used inside information about a Chinese government crackdown on cross-border brokerages to load up on short-dated put options, turning roughly $12 million in purchases into profits exceeding $100 million. That’s a return north of 900%.

Susquehanna, which sat on the other side of those trades as a market maker, says it lost over $70 million in the process. The firm is now asking courts to force brokerages to hand over account holder identities and freeze assets while the investigation unfolds.

The trade that was too perfect

In May 2026, Chinese regulators moved to crack down on cross-border brokerage operations. Two companies caught in the crossfire were Futu Holdings (FUTU) and Up Fintech Holdings, better known as Tiger Brokers (TIGR), both of which are US-listed Chinese fintech firms that facilitate international securities trading for Chinese investors. Futu was subsequently hit with a penalty amounting to 1.85 billion yuan due to regulatory violations.

Before news of the crackdown went public, the unnamed defendants allegedly bought short-dated put options on both stocks. Put options are essentially bets that a stock’s price will fall. Short-dated puts are the aggressive version of that bet, offering massive leverage if the timing is right.

The firm’s complaint describes this as one of the most significant insider trading schemes it has encountered.

DOJ and SEC are circling

Both the Department of Justice’s criminal division and the Securities and Exchange Commission are investigating the trades as of early July 2026. The DOJ probe is reportedly in its early stages, while the SEC is examining whether the options activity constitutes violations of securities laws. Neither agency has publicly commented on the scope of their investigations.

Susquehanna’s legal strategy seeks court orders to compel brokerages, including Interactive Brokers, Futu, and Tiger Brokers themselves, to reveal the identities behind the accounts that placed these trades. It also wants those assets frozen before anyone can move the money offshore.

What this means for markets and investors

If the allegations hold up, this represents a sophisticated operation involving multiple participants who had access to highly sensitive regulatory intelligence from Chinese authorities. Chinese regulatory actions affecting US-listed securities create jurisdictional puzzles that both American and Chinese authorities will need to navigate, and cooperation between US and Chinese regulators has historically been fraught.

Susquehanna’s $70 million loss illustrates a fundamental vulnerability in the market-making business: when counterparties trade on inside information, the firms providing liquidity absorb asymmetric losses they never priced in.

Being named in a lawsuit that demands customer identification data puts platforms like Interactive Brokers and Futu in an uncomfortable position. For traders and investors watching this unfold, the key variable is how quickly identities are revealed and whether the DOJ pursues criminal charges.

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