FINRA Fines Webull $4.2 Million Over AML and Best-Execution Failures

The Financial Industry Regulatory Authority (FINRA) fined and censured Webull Financial LLC Thursday, Nov. 5, imposing a $4.2 million penalty over anti-money-laundering, identity-theft prevention and best-execution deficiencies.

Webull agreed to FINRA’s findings without admitting or denying them. FINRA found that Webull approved more than 120,000 accounts between January 2020 and September 2023 without forming a reasonable belief that it knew the customers’ true identities. During that period, Webull approved at least 7 million accounts, including at least 6.5 million whose identity checks used third-party verification services.

FINRA cited applications with customer information that the firm’s third-party vendor could not reasonably verify because of inconsistencies or possible identity-fraud indicators. More than 50 applicants submitted scenic landscape photos instead of government-issued identification, yet Webull approved the accounts. Some applications were approved despite information in Webull’s systems indicating that applicants were deceased.

From June 2020 through January 2021, Webull failed to identify or investigate 473 unauthorized Automated Clearing House transfers totaling more than $1.5 million from customers at other financial institutions into Webull accounts, FINRA found. The brokerage reversed the transfers after fraud claims but did not take reasonable steps to investigate their root cause.

FINRA also cited a single account that generated nearly 2,000 equity-layering alerts and nearly 11,000 equity-spoofing alerts across more than 100 stock symbols over about 18 months. Webull did not investigate the alerts promptly and reported the activity months after the account closed.

FINRA found deficiencies in Webull’s best-execution supervision as late as October 2025, with the problems dating to February 2020. Before March 2021, the firm did not review execution quality for non-marketable orders, which made up 60% to 70% of its order flow during that period.

“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.

The settlement requires Webull to retain an independent consultant to review its best-execution program within 60 days of notice that FINRA accepted the agreement. A member of senior management who is a registered principal must certify in writing, within 180 days of that notice, that the firm has implemented remediation reasonably designed to address the anti-money-laundering and identity-theft prevention deficiencies.