FINRA Fines Webull $4.2M After 120K Accounts Bypassed Proper ID Checks

The Financial Industry Regulatory Authority has fined Webull Financial LLC $4.2 million for failures in its anti-money laundering, identity theft prevention and best execution programs. The regulator found that Webull approved more than 120,000 customer accounts between January 2020 and September 2023 without adequately verifying applicants' identities.

Some accounts were approved using photographs of scenic landscapes instead of government-issued identification, while others belonged to applicants listed as deceased in Webull's own systems. The regulator discovered that the firm's compliance program did not keep pace with its rapid business growth.

Suspicious Transactions Ignored

FINRA found that Webull failed to investigate 473 unauthorized Automated Clearing House transfers worth more than $1.5 million. These transfers moved funds from customers at other financial institutions into Webull accounts. The broker also missed an account that generated nearly 13,000 alerts for potentially manipulative trading across more than 100 stock symbols over approximately 18 months.

Other surveillance gaps included inadequate monitoring of suspicious out-of-the-money options trading, customers using the same address or device, and fraudulent account takeovers. Webull also opened dozens of accounts for foreign nationals using the same IP address or device without proper verification.

Execution Quality Reviews

FINRA also found that Webull failed to conduct adequate reviews of customer execution quality between February 2020 and May 2025. The broker sometimes failed to assess execution quality at competing market centres and neglected to review non-marketable orders, which accounted for 60% to 70% of its order flow during some periods.

Its reviews also lacked the required analysis by order type and individual security. Webull did not introduce checks for unrelated accounts sharing the same Social Security number until August 2021, more than a year and a half after the compliance issues began.

Previous Enforcement Actions

Webull settled the latest case without admitting or denying FINRA's findings. The broker agreed to certify remediation of its AML and identity theft prevention deficiencies and appoint an independent consultant to review its best execution program.

The action follows a separate $1.6 million FINRA fine in 2025 over Webull's supervision and retention of influencer promotions. In that case, the regulator found that some promotional statements were not fair and balanced or contained exaggerated and promissory claims.