Analysis of the Penalty Results for Tiger Brokers and Futu Securities - Tiger Brokers was fined 308.1 million RMB, with 103.1 million RMB of illegal gains confiscated, and the CEO fined 1.25 million RMB. - Futu Securities was fined 1.85 billion RMB, and the CEO personally fined 1.25 million RMB. Are these penalties heavy? Let’s break it down: - Tiger: Total fines and confiscations amount to 411.2 million RMB ≈ 9.5% of annual revenue, ≈ 31% of annual net profit. - Futu: Proposed fine of 1.85 billion RMB ≈ 8.8% of annual revenue, ≈ 18% of annual net profit. For individuals: - Tiger CEO Wu Tianhua’s net worth is in the hundreds of millions of dollars, while Futu’s boss Li Hua has a net worth in the billions of dollars. A 1.25 million RMB fine is just a drop in the bucket for these big shots. Conclusion: - For the companies, the penalties are significant but manageable. The stock price drop is mainly due to lowered expectations for future growth. - For the individuals, the penalties are more symbolic and serve as a warning. - The main purpose of these penalties is to cut off the arbitrage opportunities for unlicensed cross-border brokerage businesses in mainland China.