FINRA Fines Webull Financial $115,000 Over Options Order Mismarking | LeapRate
Webull Financial LLC has agreed to a $115,000 fine and censure from the Financial Industry Regulatory Authority (FINRA) after regulators found the firm mismarked hundreds of thousands of options contracts and failed to properly supervise its order-marking processes.
According to a Letter of Acceptance, Waiver, and Consent (AWC) published by FINRA, Webull routed options orders to third-party broker-dealers between October 2021 and April 2023 using inaccurate origin codes.
Roughly 180,000 options contracts, spanning about 33,000 trades, were labeled “Customer” when they should have carried a “Professional Customer” designation, a distinction that affects order prioritization and exchange fees.
FINRA said the errors stemmed from Webull applying incorrect criteria to identify Professional Customer accounts between July and December 2021. Even after adopting the correct criteria in January 2022, the firm did not properly append the required origin code to affected accounts until July 2023, despite restricting those accounts to liquidation-only trading in the interim.
Regulators also found that Webull’s supervisory systems, including its written supervisory procedures, lacked adequate provisions addressing Professional Customer classification and origin code accuracy from July 2021 through August 2023. The firm updated its procedures in September 2023.
As a result, FINRA determined Webull violated Section 17(a) of the Securities Exchange Act of 1934, Exchange Act Rule 17a-3, and FINRA Rules 4511, 3110, and 2010.
Webull, a FINRA member since January 2018, is headquartered in New York and offers self-directed trading through its mobile app, desktop platform, and website. The firm settled the matter without admitting or denying FINRA’s findings.
