Webull Financial LLC, a prominent self-directed trading platform, has been fined $1.6 million by the Financial Industry Regulatory Authority (FINRA) for failing to adequately monitor and supervise influencer advertisements promoting the firm. The firm was also cited for not maintaining sufficient systems to oversee influencer communications and for not delivering important customer disclosures.
According to a letter of acceptance, waiver, and consent issued Thursday, Webull did not admit nor deny FINRA’s findings but agreed to a censure. Webull, which operates a popular mobile app and website for retail investors, acknowledged that the violations occurred between January 2019 and December 2022.
During this period, Webull partnered with a marketing company that paid over 400 influencers to promote the firm on social media. These influencer campaigns, which utilized referral links, generated over 400,000 new accounts. However, FINRA found that some influencer posts made exaggerated claims and lacked required risk disclosures. One such post included a statement about a stock’s potential to “skyrocket to quadruple the price,” without adequately addressing the risks involved.
Furthermore, Webull failed to have a registered principal review influencer posts prior to publication, as mandated by FINRA rules. Additionally, the firm did not retain copies of the influencer advertisements, further violating regulatory requirements.
FINRA also highlighted deficiencies in Webull’s supervisory procedures, noting that the firm lacked an adequate system to ensure proper oversight of influencer communications. However, Webull has since revised its supervisory processes to improve oversight in this area.
In addition to issues with influencer ad oversight, Webull failed to deliver its Form CRS (Customer Relationship Summary) to nearly 6 million customers as required. While the firm initially filed the form on time in June 2020, it did not implement a system to ensure its delivery to customers opening accounts until October 2022. A subsequent system error continued to prevent the delivery of the form.
Other violations included the firm’s failure to maintain adequate risk management controls to prevent erroneous orders.
FINRA’s findings were based on several examinations of Webull, which ultimately led to the $1.6 million fine. The company has committed to enhancing its compliance and supervisory practices moving forward.
A representative from Webull did not immediately respond to a request for comment. FINRA declined to provide additional comment beyond the letter.
This case, titled In the Matter of Webull Financial LLC, is case number 2021072231801 before FINRA.
