Webull Financial LLC agreed to pay a $4.2 million fine after Finra found the brokerage failed to implement adequate anti-money laundering controls. Between January 2020 and September 2023, Webull opened millions of new accounts, but its compliance programs did not keep pace with the rapid growth. The regulator cited instances where customers were approved to trade despite being deceased, and others submitted photos of landscapes instead of government-issued IDs.
Finra's head of enforcement stated that supervisory systems must grow with the business to address resulting risks. As part of the settlement, Webull agreed to fix deficiencies in its programs and hire an independent consultant to ensure compliance with best-execution rules. The firm's lapses led to suspicious activity, including one account triggering nearly 13,000 alerts over 18 months for potentially manipulative trading in 100 stocks.
Webull allegedly failed to detect over 400 unauthorized transfers worth $1.5 million, which it reversed without investigating the root cause. The company settled without admitting wrongdoing.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing