The Financial Industry
Regulatory Authority has fined Webull Financial LLC $4.2 million for failures
in its anti-money laundering, identity theft prevention and best execution
programmes.
London’s trading industry is coming home!
FINRA found that
Webull approved more than 120,000 customer accounts between January 2020 and
September 2023 without adequately verifying applicants’ identities.
Some accounts were
approved using photographs of scenic landscapes instead of government-issued
identification, while others belonged to applicants listed as deceased in
Webull’s own systems.
Webull Failed to
Detect Suspicious Transactions
“Webull’s
business grew rapidly, but its compliance program did not keep pace,” said
Bill St. Louis, FINRA’s Executive Vice President and Head of Enforcement.
FINRA found that
Webull failed to investigate 473 unauthorised Automated Clearing House
transfers worth more than $1.5 million. The transfers moved funds from
customers at other financial institutions into Webull accounts.
The broker also failed
to investigate an account that generated nearly 13,000 alerts for potentially
manipulative trading across more than 100 stock symbols over approximately 18
months.
Other surveillance
gaps included inadequate monitoring of suspicious out-of-the-money options
trading, customers using the same address or device, and fraudulent account
takeovers.
Webull also opened
dozens of accounts for foreign nationals using the same IP address or device.
It did not introduce checks for unrelated accounts sharing the same Social
Security number until August 2021.
Finance Magnates contacted Webull for
comment. The firm had not responded by the time of publication.
Best Execution
Reviews Fell Short
FINRA also found that
Webull failed to conduct adequate reviews of customer execution quality between
February 2020 and May 2025.
The broker sometimes failed
to assess execution quality at competing market centres. It also failed at
certain points to review non-marketable orders, which accounted for 60% to 70%
of its order flow during some periods.
Its reviews also
lacked the required analysis by order type and individual security.
Webull Previously
Fined Over Influencer Promotions
Webull settled the
latest case without admitting or denying FINRA’s findings. It agreed to certify
remediation of its AML and identity theft prevention deficiencies and appoint
an independent consultant to review its best execution programme.
The action follows a
separate $1.6 million FINRA fine in 2025 over Webull’s supervision and
retention of influencer promotions. The regulator found that some promotional
statements were not fair and balanced or contained exaggerated and promissory
claims.
This article was written by Tareq Sikder at www.financemagnates.com.
