The Financial Industry Regulatory Authority (FINRA) has fined US brokerage Webull Financial $1.6 million for multiple compliance failings.
Webull Financial Hit With $1.6m Fine By FINRA
The failings are said to include inadequate oversight of paid influencers and widespread disclosure lapses affecting millions of clients.
FINRA said Webull failed to supervise or retain records of promotional content produced by more than 400 paid social media influencers between January 2019 and December 2022.
They add that some of the content contained exaggerated claims and omitted key risk disclosures related to margin and options trading.
The regulator found that Webull’s influencer marketing campaign breached FINRA rules on communications with the public, on supervision, and on recordkeeping. FINRA also cited violations of the Securities Exchange Act.
Additionally, they claim the firm failed to deliver the required Form CRS to approximately 5.9 million retail customers between June 2020 and December 2022.
It is claimed that Webull did not maintain records of the deliveries or implement supervisory procedures to ensure compliance.
Webull neither admitted nor denied the findings but consented to the entry of FINRA’s order, which includes a censure alongside the monetary penalty.
Founded in 2018, Webull has grown rapidly by offering commission-free trading to retail clients. The firm is registered in the U.S. and has made changes to its compliance framework in response to FINRA’s findings.
