Third Defendant Steps Forward in Insider Trading Probe, Seeks Release of Frozen Funds

The insider trading case involving Futu Holdings and Tiger Brokers has taken a new turn. Court documents reveal that a third defendant, identified as Yang Jingyao, filed a declaration with the U.S. District Court for the Southern District of New York on July 23, petitioning for the release of his frozen assets. In his filing, Yang asserted that his personal assets significantly exceed his liabilities and that he has no history of overdue debts.

The Case: Suspicious Trades Ahead of a Regulatory Crackdown

The investigation stems from a sudden regulatory move. On May 22, 2026, Chinese authorities announced penalties against certain cross-border brokers, causing shares of Futu and Tiger to plunge more than 30% in a single day. However, it was discovered that between May 7 and 21—before the announcement—a group of traders had placed large bets by acquiring short-term put options targeting these two firms, ultimately reaping profits exceeding $100 million.

The abnormal trading volume prompted options market makers to file a lawsuit, leading a U.S. court to issue a temporary restraining order on June 29, freezing the assets in the implicated brokerage accounts.

A Coincidence of Identity? Links to a Hong Kong Tycoon

The identity of defendant Yang Jingyao has drawn significant scrutiny. Public records show that the single largest shareholder and mandatory general offeror of Hong Kong-listed company Rongzun International (01780.HK) shares the exact same name, Yang Jingyao. This 32-year-old Hong Kong resident is believed to have financial ties to affluent families in mainland China.

What raises deeper questions are the strikingly aligned timelines between the two entities associated with the name Yang Jingyao:

  • May 7: Rongzun International first disclosed its takeover offer. This was the very same day the suspect put option positions were initiated.
  • July 9: Merely ten days after the court's asset freeze order (June 29), Rongzun International's takeover offer officially lapsed after failing to meet the shareholding threshold.

The tight synchronization of these events challenges explanations of mere coincidence. As of now, it remains unconfirmed by official sources whether the defendant Yang Jingyao and the Hong Kong tycoon are the same individual. Further proceedings in the case may provide the answer.