FINRA Fines Webull $4.2 Million: 120,000 Accounts Approved Without Verified Identities, Some Opened With Landscape Photos
The Financial Industry Regulatory Authority (FINRA) has fined retail brokerage Webull Financial LLC $4.2 million, finding that the firm failed to implement reasonably designed programs for anti-money laundering, identity theft prevention and best execution as its business grew rapidly. In settling the matter, Webull consented to the entry of FINRA's findings without admitting or denying the charges. In addition to the fine, the firm agreed to certify remediation of the deficiencies in its anti-money laundering and identity theft prevention programs and to retain an independent consultant to address its best execution program.
Identity verification is at the center of the action. FINRA found that between January 2020 and September 2023, while Webull was opening millions of new customer accounts each year, the firm approved the opening of more than 120,000 new customer accounts using identity verification services provided by its third-party vendors without forming a reasonable belief that it knew the true identity of those customers. For example, the firm approved accounts for more than 50 customers who submitted photos of scenic landscapes instead of government-issued identification, and in other instances it approved accounts for customers despite information in its own systems indicating that the customers were deceased.
On suspicious activity monitoring, FINRA found that Webull failed to detect and report a variety of suspicious transactions. The firm failed to identify or investigate 473 unauthorized ACH transfers used to move over $1.5 million from customers at other financial institutions into Webull accounts, and it failed to timely investigate a single account that triggered nearly 13,000 alerts for potentially manipulative trading activity in more than 100 stock symbols during the approximately 18 months the account was open. The firm also had no processes to identify potentially suspicious out-of-the-money options trading, lacked surveillance to identify unrelated customers trading from the same address or device, and lacked reasonable surveillance to detect fraudulent account takeovers in a timely manner.
Between January 2020 and February 2023, Webull also failed to have an identity theft prevention program reasonably designed to detect, prevent and mitigate identity theft, relying instead on a deficient customer identification program. As a result, the firm failed to detect red flags including dozens of accounts opened for foreign nationals using the same IP address or device, and it did not implement a process to check whether multiple unrelated accounts were opened using the same Social Security number until August 2021.
On best execution, FINRA found that Webull failed to reasonably supervise for best execution and failed to conduct reasonable, regular and rigorous reviews of customers' execution quality. At certain points between at least February 2020 and at least May 2025, the firm conducted no review of the execution quality available at competing market centers, and at other times it obtained such data but failed to sufficiently review it. At certain points it also failed to review execution quality for non-marketable orders, which made up 60 to 70 percent of its order flow during certain periods, and did not conduct reviews on a type-of-order or security-by-security basis as required.
Bill St. Louis, FINRA's Executive Vice President and Head of Enforcement, said Webull's business grew rapidly but its compliance program did not keep pace, and that firms must ensure their supervisory systems grow with their business and address the risks they present. He said Webull failed to do so in fundamental areas, including verifying customers' identities, detecting suspicious activity and ensuring the best possible execution of customer trades, and that FINRA holds firms accountable when their compliance programs do not adequately address the risks created by their business.
It is not Webull's first FINRA fine. In 2025, FINRA censured and fined the firm $1.6 million for failing to reasonably supervise and retain social media communications by influencers who promoted the firm, including statements that were not fair and balanced, or were promissory or exaggerated. (Source: Financial Industry Regulatory Authority)
Source: Financial Industry Regulatory Authority
Published by GSM · USA (original Chinese edition)
Photo: 图：美国证券交易委员会（SEC）总部大楼，FINRA 受 SEC 监管。AgnosticPreachersKid 摄，CC BY-SA 3.0，经 Wikimedia Commons。 / Photo: U.S. Securities and Exchange Commission headquarters; FINRA is overseen by the SEC. By AgnosticPreachersKid, CC BY-SA 3.0, via Wikimedia Commons.
