Futu Holdings (NASDAQ: FUTU) Stock Plummets Amid Regulatory Crackdown and Downgrade

Font: Financial Modeling Prep  • May 25, 2026

• Futu Holdings (NASDAQ: FUTU), a leading online brokerage, received a downgrade to Neutral from Goldman Sachs, with a new price target of $102.13.
• The downgrade is linked to a China Securities Regulatory Commission (CSRC) investigation into Futu Holdings for alleged unlicensed securities and futures business in mainland China.
• This regulatory pressure caused Futu Holdings shares to fall by 27.53% to $89.76, prompting an additional investigation by the Schall Law Firm regarding investor disclosures.

Futu Holdings (NASDAQ: FUTU) is a Hong Kong-based company that operates popular online trading platforms Moomoo and Futubull. These fintech platforms provide comprehensive brokerage services, allowing users to trade stocks and other financial products. The company faces significant competition from other online brokers targeting Chinese investors in the dynamic Chinese stock market.

On May 25, 2026, Goldman Sachs analyst Shuo Yang downgraded Futu Holdings to a Neutral rating from a previous Buy. This action is a signal to investors that the analyst now sees the stock as having average investment potential. A new price target of $102.13 was set.

The downgrade follows major regulatory news from China. As highlighted by Forbes, Futu Holdings is facing an investigation by the China Securities Regulatory Commission (CSRC). The regulator alleges the company conducted securities and futures business in mainland China without the required licenses, which is a violation of the country's laws regarding financial services.

This development had an immediate and severe impact on the company's stock performance. Shares of Futu Holdings fell by 27.53%, or $34.10, to a price of $89.76. As noted by Invezz, the stock is now down more than 50% from its year-to-date high due to the ongoing regulatory crackdown and market volatility.

Adding to the company's challenges, the Schall Law Firm has launched its own investigation. As reported by GlobeNewswire, the firm is looking into claims that Futu Holdings may have issued false statements or failed to disclose critical information to its investors regarding its regulatory compliance and corporate governance in China.