Overview
- FINRA imposed a $4.2 million penalty on Webull for failures in its AML, identity‑theft prevention and best‑execution programs and accepted a settlement in which the firm did not admit or deny the findings.
- Regulator findings reported by industry outlets say Webull approved more than 120,000 accounts without adequate identity verification, including accounts opened with non‑ID images or for people flagged as deceased in the firm's systems.
- FINRA identified breakdowns in transaction monitoring, including 473 uninvestigated Automated Clearing House transfers totaling more than $1.5 million and an account that generated nearly 13,000 alerts for potentially manipulative trading over about 18 months.
- The agency found Webull’s best‑execution reviews were insufficient because the firm failed to assess execution quality across competing market centers and did not analyze many non‑marketable orders by order type or security.
- The action follows a prior 2025 FINRA sanction over influencer‑promotion supervision and signals growing regulator scrutiny of fast‑growing retail brokerages as they scale controls that protect customers and detect fraud.