TLDR
- A New York federal judge denied Susquehanna’s request to freeze nearly $100 million tied to alleged insider trading
- The court found no proof that defendants would hide or move funds before a judgment
- Susquehanna could not prove traders used nonpublic information ahead of China’s May 22 crackdown announcement
- The judge rejected both the preliminary injunction and an asset attachment request
- Some defendants argued their trades were based on publicly visible market signals, not inside information
A New York federal judge has denied Susquehanna Securities and Susquehanna Investment Group’s request to freeze nearly $100 million linked to an alleged insider trading scheme tied to a Chinese government crackdown on cross-border trading platforms.
A federal judge dealt a setback to Susquehanna's lawsuit claiming it lost tens of millions of dollars to insider trading on a Chinese regulatory crackdown, denying a request to keep the alleged traders’ accounts frozen https://t.co/8eaxi2ovuD
— Bloomberg (@business) September 15, 2026
The ruling was issued on September 14 by Judge Arun Subramanian of the U.S. District Court for the Southern District of New York. Susquehanna filed the lawsuit on June 29 against 100 unnamed defendants, alleging violations of Section 20A of the Securities Exchange Act of 1934 and unjust enrichment. Citadel Securities later joined the case as an intervenor.
The dispute centers on trading activity before May 22, when China announced a crackdown on cross-border trading platforms. Susquehanna claimed defendants bought short-dated put options using material nonpublic information, which paid off when the announcement caused a sharp drop in related securities.
Court Finds No Imminent Risk to the Funds
Susquehanna narrowed its freeze request from 100 defendants to 40. It asked the court to stop them from transferring or disposing of proceeds held at third-party brokerages.
The judge found that Susquehanna did not provide enough evidence that defendants were likely to hide or move their assets before a judgment. The court also noted that accepting Susquehanna’s argument could effectively allow asset freezes in most insider trading cases without sufficient proof.
The strongest claim Susquehanna presented involved one defendant, identified as John Doe 3, who allegedly moved more than $10 million from an account before a freeze took effect. The court said that claim lacked supporting evidence and that moving money from a trading account does not automatically suggest an attempt to avoid a judgment.
Defendants Offered Alternative Explanations
Susquehanna also struggled to prove that defendants likely traded on inside information rather than public market signals.
One defendant, Zhengfei Li, submitted trading records showing two equally sized positions, half expiring before May 22 and half after. He said the trades were based on unusually heavy put option activity visible in public market data, not private information. On May 21, the put-to-call ratio was roughly 49 to 1, data he said led him to enter his positions. Another defendant submitted messages showing her surprise when the Chinese crackdown became public, which the court said was consistent with not having prior knowledge.
The court said defendants may have acted on publicly available signals, which would not qualify as nonpublic information under the insider trading claim.
Susquehanna also had not identified the alleged tipper, the fiduciary duty owed, or any personal benefit received for passing the information along.
The judge also denied Susquehanna’s alternative request for an asset attachment order, finding it had not shown a likelihood of success on either claim.
An earlier order restricting the funds dissolved at 5 p.m. ET on September 16.
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