FINRA discovered that the retail trading platform failed to maintain reasonable policies to verify user identities during account registration and lacked systems to monitor suspicious activity between January 2020 and September 2023. Regulators also cited the company for failing to ensure that customer trades were executed in the best interests of its users. While resolving the matter without admitting or denying the findings, the firm agreed to hire an independent consultant to overhaul its compliance operations.
Key points
Webull resolved the regulatory action without admitting or denying the findings reached b…: Webull resolved the regulatory action without admitting or denying the findings reached by FINRA.
The digital trading platform must hire an independent consultant as part of the agreement…: The digital trading platform must hire an independent consultant as part of the agreement to address its operational shortcomings.
Inadequate customer verification during onboarding and insufficient monitoring of suspici…: Inadequate customer verification during onboarding and insufficient monitoring of suspicious trades were central to the regulator's enforcement decision.
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Nov 5 : The Financial Industry Regulatory Authority, Wall Street's industry regulator, said on Thursday it fined Webull Financial $4.2 million for failing to implement programs aimed at preventing illicit finance and other issues.
• Between January 2020 and September 2023, the digital brokerage did not implement reasonably designed programs to prevent money laundering and identity theft, FINRA said.
• The firm did not have reasonable policies in place, for example, to verify customer identities when they signed up for accounts, FINRA said.
• Webull also did not establish policies and procedures to detect and flag suspicious transactions, FINRA said.
• The firm also failed to institute a program to make sure customer transactions were done in the best way for the customers, FINRA said.
• Webull, which did not admit or deny FINRA's findings, did not respond immediately to requests for comment.
• As part of the settlement, Webull has agreed to remediate issues and hire an independent consultant.
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