Webull Financial LLC
The findings stated that certain influencer communications promoting the firm were not fair and balanced and included exaggerated and promissory statements. The firm failed to review and approve all influencers’ posts about the firm and failed to preserve records of those posts. The firm failed to establish, maintain, and enforce a reasonably designed supervisory system, including WSPs, for influencers’ retail communications.
The firm did not have a registered principal review and approve all influencers’ static posts or options communications prior to posting on social media platforms. The firm also did not review all influencers retail communications posted in online interactive electronic forums in the same manner as required for supervising and reviewing correspondence.
FINRA also found that the firm failed to review and approve certain retail communications posted by its registered representatives or preserve records of those communications. At least 70 registered representatives posted messages concerning securities trading on an online interactive electronic forum maintained by a firm affiliate, which was accessible through the firm’s mobile application. Certain posts contained links to the firm’s website where users could trade those securities through the firm’s brokerage accounts.
The findings also stated that the firm failed to deliver its customer relationship summary (Form CRS), failed to make and preserve required related records, and failed to establish and maintain a supervisory system reasonably designed to achieve compliance with its Form CRS obligations. The firm timely filed and published on its website its Form CRS by the initial compliance date, but the firm failed to develop and implement a system to ensure delivery of a copy of it to customers opening accounts until approximately October 2022, when the firm launched a new document management system. Moreover, even after the firm established a system for delivery of the Form CRS to new broker customers, a system error caused the firm to fail to deliver Form CRS to those customers until December 2022.
The findings also included that the firm failed to provide a consolidated display that compiled with the Vendor Display Rule and failed to reasonably supervise for compliance with the Vendor Display Rule. The firm’s default display, which was utilized by the majority of its customers through its desktop, mobile, tablet and web platforms, included market data that was limited to only one market.
FINRA found that the firm failed to establish, document, and maintain financial risk management controls and supervisory procedures reasonably designed to prevent the entry of erroneous orders. The firm maintained single order quantity and price controls that were too high to prevent the entry of erroneous orders in certain securities.
