FINRA fines Webull $4.2 million over AML and best execution failures

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FINRA fines Webull $4.2M

Highlights

FINRA fined Webull $4.2 million after finding failures in anti-money laundering, identity theft prevention, and best execution programs during rapid customer growth from January 2020 to September 2023.
Webull approved over 120,000 accounts despite deficient identity checks, missed detection of $1.5 million in suspicious ACH transfers, and failed to implement reasonable identity theft prevention until August 2021.
From February 2020 to at least May 2025, Webull failed to conduct regular, rigorous execution quality reviews for 60%-70% of order flow, prompting mandated remediation and independent oversight of its best execution framework.

Compliance breakdown during rapid growth

As reported by FINRA, citing the Financial Industry Regulatory Authority, the brokerage failed to maintain reasonably designed programs for anti-money laundering, identity theft prevention and best execution, leading to a $4.2 million fine and additional remedial measures.

FINRA said Webull's customer growth accelerated sharply between January 2020 and September 2023, with millions of new accounts opened each year, while the firm executed billions of shares from at least February 2020 and received payment for order flow. Bill St. Louis, executive vice president and head of enforcement at FINRA, said the company's compliance systems did not keep pace with the scale and risks of its business.

According to FINRA's findings, Webull approved more than 120,000 new accounts between January 2020 and September 2023 using third-party identity verification services without a reasonable basis to believe it knew the customers' true identities. The regulator said some accounts were opened even when applicants submitted scenic landscape photos instead of government identification, while other approvals involved customers flagged in the firm's own systems as deceased.

FINRA also said Webull failed to detect and report suspicious transactions over the same period. The regulator cited 473 unauthorized ACH transfers that moved more than $1.5 million from customers at other financial institutions into Webull accounts, and said the firm did not promptly investigate one account that generated nearly 13,000 alerts for potentially manipulative trading across more than 100 stock symbols over roughly 18 months.

Between January 2020 and February 2023, the firm also lacked an identity theft prevention program reasonably designed to detect, prevent and mitigate identity theft, FINRA said. It added that Webull opened dozens of accounts for foreign nationals using the same IP address or device and did not introduce a process to check whether multiple unrelated accounts used the same Social Security number until August 2021.

Execution oversight and broader industry impact

FINRA said Webull also failed to reasonably supervise for best execution and did not carry out regular and rigorous reviews of execution quality. At certain points from at least February 2020 to at least May 2025, the firm either conducted no review of execution quality available at competing market centers or obtained the data without sufficiently analyzing it.

The regulator said the shortcomings extended to non-marketable orders, which accounted for 60% to 70% of Webull's order flow during certain periods. FINRA said the firm also did not perform required reviews by order type or on a security-by-security basis, weakening its ability to assess whether customers were receiving the most favorable available terms.

In addition to the fine, Webull agreed to certify that it has remediated deficiencies in its AML and identity theft prevention programs and to retain an independent consultant for its best execution framework. The settlement was reached without the firm admitting or denying FINRA's findings.

The action adds to prior regulatory scrutiny of the broker. In 2025, FINRA censured and fined Webull $1.6 million over failures to supervise and retain social media communications by influencers promoting the firm, including statements the regulator said were not fair and balanced or were exaggerated.

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