Group 1 - Tiger Securities (NASDAQ:TIGR) and Futu Holdings (NASDAQ:FUTU) experienced stock price increases, with Tiger closing at $8.41 (up 1.94%) and Futu at $112.14 (up 6.93%) on June 4 [1] - A recent investigation revealed that Tiger Securities is allegedly continuing to develop new clients in mainland China and facilitating account openings through potentially fraudulent means, despite being previously identified by the China Securities Regulatory Commission (CSRC) as engaging in illegal securities business [1] - The CSRC announced in December 2022 that it would advance the rectification of illegal cross-border operations by companies like Tiger Securities, formally categorizing their activities targeting mainland investors as "illegal securities business" [1] Group 2 - In response to the allegations, Tiger Securities stated that the reports are false and that they ceased accepting new account applications from mainland users as of December 31, 2022, only servicing existing clients with prior proof of account opening with other overseas brokers [2] - The founder of Tiger Securities, Wu Tianhua, expressed skepticism regarding the claims, arguing that the account opening process cannot be solely attributed to the actions of individual marketing personnel, raising questions about whether these actions are part of the company's broader practices [2] - Recent experiences of journalists posing as new clients successfully opening accounts at Tiger Securities further corroborate the allegations of regulatory violations [2]

Core Viewpoint - The article highlights the ongoing illegal operations of Tiger Securities in mainland China, particularly in facilitating account openings for mainland investors despite regulatory prohibitions, amid a surge in interest in Hong Kong stocks and IPOs [1][11]. Group 1: Illegal Operations and Account Openings - Tiger Securities is reportedly continuing to develop new clients in mainland China by providing account opening services through potentially fraudulent means, including the submission of falsified documents [1][2]. - A mainland investor successfully opened an account with Tiger Securities by submitting a fabricated account proof from a foreign broker, which was processed in a matter of minutes [2][3]. - The company has been actively recruiting personnel across various cities in mainland China for roles related to securities brokerage, investment banking, and asset management, indicating a significant expansion of its operations [6][8]. Group 2: Regulatory Context and Responses - The China Securities Regulatory Commission (CSRC) has previously classified the cross-border operations of Tiger Securities as illegal, leading to a crackdown on such activities in 2022 [10][11]. - Despite the regulatory environment, Tiger Securities reported substantial revenue growth, with year-on-year increases of 77.3% and 55.3% for the fourth quarter of 2024 and the first quarter of 2025, respectively [11][12]. - The company has been involved in a significant number of IPO underwriting activities in Hong Kong, capturing a notable market share despite the restrictions on new client development [12][13]. Group 3: Market Demand and Competitive Landscape - The demand for Hong Kong stock trading among mainland investors has surged, particularly as traditional avenues like "Hong Kong Stock Connect" have stringent requirements that many investors cannot meet [12][13]. - Tiger Securities has positioned itself to meet the specific needs of mainland investors by offering easier access to Hong Kong stocks, which may lead to further scrutiny from regulators [13].