The Financial Industry Regulatory Authority has fined Webull Financial $4.2 million for failing to run reasonably designed anti-money laundering, identity theft prevention and best execution programs, finding that the broker approved more than 120,000 new accounts without forming a reasonable belief that it knew who the customers were.
Those accounts were opened between January 2020 and September 2023 using identity verification services from third-party vendors, which FINRA did not name. In one example, Webull approved accounts for more than 50 customers who submitted photos of scenic landscapes instead of government-issued identification. In others, it approved customers even though information in its own systems indicated that they were deceased.
“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. “Firms must ensure that their supervisory systems grow with their business and address the risks they present. Webull failed to do so in fundamental areas, including verifying its customers’ identities, detecting suspicious activity and ensuring the best possible execution of customer trades.”
FINRA also found that from January 2020 to February 2023, Webull had no identity theft prevention program reasonably designed to detect, prevent and mitigate identity theft, relying instead on a deficient customer identification program. The firm missed red flags and opened dozens of accounts for foreign nationals using the same IP address or device. It had no process to check whether multiple unrelated accounts were opened with the same Social Security number until August 2021.
Webull was opening millions of new accounts a year during that period. It lacked surveillance to spot unrelated customers trading from the same address or device, and lacked reasonable surveillance to detect fraudulent account takeovers in a timely manner. It failed to identify or investigate 473 unauthorized ACH transfers that moved more than $1.5 million from customers at other financial institutions into Webull accounts, and it did not promptly investigate one account that triggered nearly 13,000 alerts for potentially manipulative trading in more than 100 stock symbols during the roughly 18 months it was open.
Webull consented to the findings without admitting or denying them. Besides paying the fine, it must certify that it has fixed the deficiencies in its anti-money laundering and identity theft programs, and retain an independent consultant to address its best execution program, where FINRA found the firm failed to conduct regular and rigorous reviews of execution quality. FINRA fined Webull $1.6 million in 2025 over its supervision of social media influencers who promoted the firm.
Sources: FINRA
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By the ID Tech Editorial Team
