In re WEBULL FINANCIAL LLC

 
 
 
 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 101707 / November 22, 2024 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-22330 
 
 
In the Matter of 
 
WEBULL FINANCIAL LLC, 
 
Respondent. 
 
 
 
 
ORDER INSTITUTING ADMINISTRATIVE 
AND CEASE-AND-DESIST PROCEEDINGS, 
PURSUANT TO SECTIONS 15(b) AND 21C 
OF THE SECURITIES EXCHANGE ACT 
OF 1934, MAKING FINDINGS, AND 
IMPOSING REMEDIAL SANCTIONS AND 
A CEASE-AND-DESIST ORDER  
   
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that public administrative and cease-and-desist proceedings be, and hereby are, 
instituted pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 (“Exchange 
Act”) against Webull Financial LLC ( “Webull” or “Respondent”).   
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”), which the Commission has determined to accept. Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over it and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting 
Administrative and Cease-And-Desist Proceedings, Pursuant to Sections 15(b) and 21C of the 
Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a 
Cease-And-Desist Order (“Order”), as set forth below. 
 
 

 2 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds that:  
 
Summary 
 
1. From October 2018 through December 2022 (the “Relevant Period”), Respondent, a 
registered broker-dealer, filed deficient Suspicious Activity Reports (“SARs”) with the U.S. 
Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”). These filed 
SARs were deficient because Webull failed to include all of the required details of the reported 
suspicious transactions that it knew or should have known in the narrative of the SARs, as required 
by regulation and FinCEN guidance.   
2. By failing to file complete and sufficient SARs, Webull willfully
1
 violated Section 
17(a) of the Exchange Act and Rule 17a-8 thereunder.  
 
Respondent 
 
3. Webull Financial LLC is organized in Delaware as a limited liability company, 
with its principal place of business in New York, New York. It has been registered with the 
Commission as a broker-dealer since 2018. Respondent provides a self-directed investment 
platform and primarily serves retail investors.   
 
The Bank Secrecy Act 
 
4. The Bank Secrecy Act (“BSA”) and implementing regulations promulgated by 
FinCEN require that broker-dealers file SARs with FinCEN to report a transaction (or a pattern of 
transactions of which the transaction is a part) conducted or attempted by, at, or through the 
broker-dealer involving or aggregating to at least $5,000 that the broker-dealer knows, suspects, or 
has reason to suspect: (1) involves funds derived from illegal activity or is intended or conducted to 
disguise funds derived from illegal activities; (2) is designed to evade any requirement of the BSA; 
(3) has no business or apparent lawful purpose or is not the sort in which the particular customer 
would normally be expected to engage, and the broker-dealer knows of no reasonable explanation 
of the transaction after examining the available facts, including the background and possible 
purpose of the transaction; or (4) involves use of the broker-dealer to facilitate criminal activity. 31 
C.F.R. § 1023.320(a)(2) (“SAR Rule”). Broker-dealers are required to file a SAR no later than 
thirty (30) calendar days after the date of the initial detection of facts that may constitute a basis for 
filing a SAR under the SAR Rule. 31 C.F.R. § 1023.320(b)(3). In cases where the broker-dealer 
 
1
 “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act “‘means no 
more than that the person charged with the duty knows what he is doing.’” Wonsover v. SEC, 
205 F.3d 408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 
1949)). There is no requirement that the actor “also be aware that he is violating one of the Rules 
or Acts.” Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965). 

 3 
cannot identify a suspect on the date of initial detection, it must file the SAR within sixty (60) 
calendar days of the initial detection of facts that may constitute a basis for filing a SAR. Id.  
5. FinCEN’s    instructions for filing SARs throughout the Relevant Period required that 
the SAR narrative contain “a clear, complete, and concise description of the activity, including 
what was unusual or irregular that caused suspicion” and to “include any other information 
necessary to explain the nature and circumstances of the suspicious activity.” FinCEN Suspicious 
Activity Report Electronic Filing Requirements (October 2012 and August 2021).
  2
 As noted by 
FinCEN, in order to be effective tools and fulfill their intended purpose, SAR narratives must 
generally “identify the five essential elements of information—who? what? when? where? and 
why?—of the suspicious activity being reported” and must include a “summary of the ‘red flags’ 
and suspicious patterns of activity that initiated the SAR.” FinCEN Guidance on Preparing a 
Complete and Sufficient Suspicious Activity Report Narrative (November 2003).
  3
 FinCEN 
guidance interpreting Section 1023.320 is entitled to deference and when a SAR is filed “it must 
include information about each of the Five Essential Elements of the suspicious activity.” See 
SEC v. Alpine Sec. Corp., 308 F. Supp. 3d 775, 791, 804 (S.D.N.Y. 2018), aff’d 982 F.3d 68 (2d 
Cir. 2020), cert. denied, Alpine Sec. Corp. v. SEC, 142 S. Ct. 461 (2021). When a SAR “lack[s] 
basic information regarding the Five Essential Elements...[the] SAR [i]s deficient as a matter of 
law.” Id. at 800.  
6. Exchange Act Rule 17a-8 requires  broker-dealers registered with the Commission 
to comply with the reporting, recordkeeping, and record retention requirements of Chapter X of 
Title 31 of the Code of Federal Regulation, which contains the SAR Rule and other requirements. 
Failing to file complete and sufficient SAR narratives as required by the SAR Rule and the 
FinCEN guidance is a violation of Section 17(a) of the Exchange Act and Rule 17a-8 thereunder. 
See Alpine Sec. Corp., 308 F. Supp. 3d at 798-807.   
Webull’s    Policies and Procedures 
 
7. During the Relevant Period, Webull maintained certain written policies and 
procedures relating to its anti-money laundering (“AML”) compliance program and its filing of 
SARs. Among other things, Webull’s policies and procedures stated that Webull would file SARs 
“for transactions that may be indicative of money laundering activity.”  
8. In February 2020, Webull amended its policies and procedures to include:   
FINCEN requires that SAR narratives should contain a chronological and complete 
account of the violation of law in order to explain the nature of the suspicious 
activity. The report should also state in detail Webull’s reason why the transaction 
is illegal or suspicious. The FinCEN guidance also states the following:  
 
2
 See 
https://www.fincen.gov/sites/default/files/shared/FinCEN%20SAR%20ElectronicFilingInstructio
ns-%20Stand%20Alone%20doc.pdf. 
3
 See https://www.fincen.gov/sites/default/files/shared/sarnarrcompletguidfinal_112003.pdf. 

 4 
• Do not assume the reader is familiar with your institution’s internal 
terminology, acronyms, operational processes, or has other knowledge 
related to the reported violation. 
• The narrative should provide a detailed description of the known or 
suspected suspicious activity  
• Who, what, when, where why, and how should be explained. 
• Indicate if suspect transactions involve other domestic or international 
banks and identify the banks, their locations, account numbers, etc. 
• Provide the relevant facts about all parties facilitating the suspect activity or 
transaction 
• Explain in detail the filer’s position that the activity or transaction is 
suspicious  
• Summarize the report and include any planned or completed follow up 
actions  
Webull’s    Deficient SARs 
9. Despite these policies and procedures, throughout the Relevant Period, Webull filed 
SARs that did not contain the information in the SAR narrative as required by FinCEN. Certain of 
Webull’s filed SARs omitted facts identifying the “five essential elements”—namely the “who, 
what, when, where, and why” of the suspicious activity being reported—from the SAR narratives. 
These facts were necessary to make the SAR narratives effective tools and fulfill their intended 
purpose. 
10. For example, in March 2021, Webull filed a SAR in which the narrative referenced 
options trading in two stocks in an account that had been transferred from another broker-dealer 
and stated that the account might be “compromised.” This SAR narrative, however, failed to 
include all of the information as required by FinCEN, including the name of the other broker-
dealer and the date the account was transferred from the other broker-dealer; details about the 
options trading, such as the dates, times, amounts, and prices of the option contracts and purchases 
or sales; why the options trading was suspicious; how the account was compromised and why 
Webull believed it was compromised; and any actions taken by Webull.   
11. In another example, in July 2021, Webull filed a SAR in which the narrative stated 
that a   client was trading “illiquid options chains” in a stock and was engaging in potential money 
laundering through three different bank accounts. This SAR narrative, however, failed to include 
all of the information as required by FinCEN, including the account numbers and names of the 
financial institutions that the customer was using for potential money laundering; details about the 
options trading, such as the dates, times, amounts, and prices of the option contracts and purchases 
or sales; why the options trading was suspicious; information about how the customer was 
engaging in money laundering, including the dates and amounts of funds transferred from the 
Webull account to any financial institutions and why this was suspicious; and any actions taken by 
Webull.   
12. As a further example, in December 2022, Webull filed a SAR in which the 
narrative stated that the client had placed multiple orders since the account opened and realized 

 5 
significant profits, the client was located in a foreign country, and that Webull had restricted the 
account due to suspicious activities and a “high probability” of potential insider trading. This SAR 
narrative, however, failed to include all of the information as required by FinCEN, including the 
time-frame of the suspicious trades; details about the trading, such as the identity of the securities 
involved and the dates, times, amounts, and prices of the purchases or sales; why the trading was 
suspicious; and why there was a high probability of insider trading.   
13. As a result of the conduct described above, Webull willfully violated Section 17(a) 
of the Exchange Act and Rule 17a-8 thereunder. 
Webull’s    Remedial Efforts and Cooperation  
 
In determining to accept the Offer, the Commission considered remedial acts undertaken by 
Respondent and cooperation afforded the Commission staff.  
 
IV. 
 
Undertakings  
 
Prior to this action, Webull engaged a consultant (the “Compliance Consultant”) to conduct 
a comprehensive review of Respondent’s AML compliance program and the implementation and 
effectiveness of Respondent’s AML policies and procedures, among other areas of focus. The 
Compliance Consultant prepared a report that described the review performed by the Compliance 
Consultant, the names of the individuals who performed the review, the conclusions reached, and 
the Compliance Consultant’s recommendations, including recommendations for changes in or 
improvements to Respondent’s AML program. As part of the remedial measures already in 
progress, and given the nature and scope of the Commission’s claims, Respondent has undertaken 
to:  
A. Within sixty (60) days from the issuance of this Order, at its own cost, adopt all 
recommendations in the written report of the AML Compliance Consultant previously identified to 
the Commission staff (the “Report”), to the extent that any such recommendations have not yet 
been adopted.  
B. Within ninety (90) days from the issuance of this Order, certify in writing to the 
Compliance Consultant and the Commission staff that Respondent has adopted and implemented 
all of the Compliance Consultant’s recommendations in the Report. No later than one hundred 
twenty (120) days after the entry of the Order, the Compliance Consultant shall conduct such 
review as it deems appropriate to verify that Respondent has appropriately implemented the 
recommendations in the Report. Unless otherwise directed by the Commission staff, all reports, 
certifications, and other documents required to be provided to the Commission staff shall be sent to 
Ian S. Karpel, Assistant Regional Director, Denver Regional Office, 1961 Stout Street, Suite 1700, 
Denver, CO 80294.  

 6 
C. Cooperate fully with the Compliance Consultant and provide the Compliance 
Consultant with access to such files, books, records, and personnel as are reasonably requested by 
the Compliance Consultant for review.  
D. Preserve for a period of not less than six (6) years from the end of the fiscal year 
last used, the first two (2) years in an easily accessible place, any record of its compliance with the 
undertakings set forth herein.  
E. Certify, in writing, compliance with its undertakings set forth above. The 
certification shall identify the undertakings, provide written evidence of compliance in the form of 
a narrative, and be supported by exhibits sufficient to demonstrate compliance. The Commission 
staff may make reasonable requests for further evidence of compliance, and Respondent agrees to 
provide such evidence. The certification and supporting materials shall be submitted to Ian S. 
Karpel, Assistant Regional Director, with a copy of the Office of Chief Counsel of the 
Enforcement Division, no later than sixty (60) days from the date of the completion of the 
undertakings.   
For good cause shown, the Commission staff may extend any of the procedural dates 
relating to the undertakings. Deadlines for procedural dates shall be counted in calendar days, 
except that if the last day falls on a weekend or federal holiday, the next business day shall be 
considered the last day.  
The reports by the Compliance Consultant will likely include confidential financial, 
proprietary, competitive business, or commercial information. Public disclosure of the reports 
could discourage cooperation, impede pending or potential government investigations, or 
undermine the objectives of the reporting requirement. For these reasons, among others, the reports 
and the contents thereof are intended to remain and shall remain non-public, except (1) pursuant to 
court order, (2) as agreed to by the parties in writing, (3) to the extent that the Commission 
determines in its sole discretion that disclosure would be in furtherance of the Commission’s 
discharge of its duties and responsibilities, or (4) as otherwise required by law.  
V. 
 
 In view of the foregoing, the Commission deems it appropriate and in the public interest to 
impose the sanctions agreed to in Respondent’s Offer. 
 
 Accordingly, pursuant to Sections 15(b) and 21C of the Exchange Act, it is hereby 
ORDERED that: 
 
 A. Respondent cease and desist from committing or causing any violations and any 
future violations of Section 17(a) of the Exchange Act and Rule 17a-8 promulgated thereunder.    
 
B. Respondent is censured.  
C. Respondent shall, within ten (10) days of the entry of this Order, pay a civil money 
penalty in the amount of $125,000 to the Securities and Exchange Commission for transfer to the 

 7 
general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3). If timely 
payment is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717.   
 
Payment must be made in one of the following ways:   
 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm
; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying 
Webull as a Respondent in these proceedings, and the file number of these proceedings; a copy of 
the cover letter and check or money order must be sent to Nicholas Heinke, Associate Regional 
Director, Division of Enforcement, Securities and Exchange Commission, 1961 Stout Street, Ste. 
1700, Denver, CO 80294.   
 
 D. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 
treated as penalties paid to the government for all purposes, including all tax purposes. To preserve 
the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor Action, it shall 
not argue that it is entitled to, nor shall it benefit by, offset or reduction of any award of compensatory 
damages by the amount of any part of Respondent’s payment of a civil penalty in this action (“Penalty 
Offset”).  If the court in any Related Investor Action grants such a Penalty Offset, Respondent agrees 
that it shall, within thirty (30) days after entry of a final order granting the Penalty Offset, notify the 
Commission’s counsel in this action and pay the amount of the Penalty Offset to the Securities and 
Exchange Commission.  Such a payment shall not be deemed an additional civil penalty and shall not 
be deemed to change the amount of the civil penalty imposed in this proceeding.  For purposes of this 
paragraph, a “Related Investor Action” means a private damages action brought against Respondent 
by or on behalf of one or more investors based on substantially the same facts as alleged in the Order 
instituted by the Commission in this proceeding.   
 
 
 
 
 

 8 
E. Respondent shall comply with the undertakings enumerated in Section IV. above. 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
        Secretary 

UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 101707 / November 22, 2024 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-22330 
 
 
In the Matter of 
 

WEBULL FINANCIAL LLC, 
 
Respondent. 
 
 
 
 

ORDER INSTITUTING ADMINISTRATIVE 
AND CEASE-AND-DESIST PROCEEDINGS, 
PURSUANT TO SECTIONS 15(b) AND 21C 
OF THE SECURITIES EXCHANGE ACT 
OF 1934, MAKING FINDINGS, AND 
IMPOSING REMEDIAL SANCTIONS AND 
A CEASE-AND-DESIST ORDER  

   
 

I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that public administrative and cease-and-desist proceedings be, and hereby are, 
instituted pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 (“Exchange 
Act”) against Webull Financial LLC (“Webull” or “Respondent”).   

 
II. 

 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”), which the Commission has determined to accept. Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over it and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting 
Administrative and Cease-And-Desist Proceedings, Pursuant to Sections 15(b) and 21C of the 
Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a 
Cease-And-Desist Order (“Order”), as set forth below. 

 
 



 2 

III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds that:  
 

Summary 
 

1. From October 2018 through December 2022 (the “Relevant Period”), Respondent, a 
registered broker-dealer, filed deficient Suspicious Activity Reports (“SARs”) with the U.S. 
Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”). These filed 
SARs were deficient because Webull failed to include all of the required details of the reported 
suspicious transactions that it knew or should have known in the narrative of the SARs, as required 
by regulation and FinCEN guidance.   

2. By failing to file complete and sufficient SARs, Webull willfully1 violated Section 
17(a) of the Exchange Act and Rule 17a-8 thereunder.  
 

Respondent 
 

3. Webull Financial LLC is organized in Delaware as a limited liability company, 
with its principal place of business in New York, New York. It has been registered with the 
Commission as a broker-dealer since 2018. Respondent provides a self-directed investment 
platform and primarily serves retail investors.   
 

The Bank Secrecy Act 
 

4. The Bank Secrecy Act (“BSA”) and implementing regulations promulgated by 
FinCEN require that broker-dealers file SARs with FinCEN to report a transaction (or a pattern of 
transactions of which the transaction is a part) conducted or attempted by, at, or through the 
broker-dealer involving or aggregating to at least $5,000 that the broker-dealer knows, suspects, or 
has reason to suspect: (1) involves funds derived from illegal activity or is intended or conducted to 
disguise funds derived from illegal activities; (2) is designed to evade any requirement of the BSA; 
(3) has no business or apparent lawful purpose or is not the sort in which the particular customer 
would normally be expected to engage, and the broker-dealer knows of no reasonable explanation 
of the transaction after examining the available facts, including the background and possible 
purpose of the transaction; or (4) involves use of the broker-dealer to facilitate criminal activity. 31 
C.F.R. § 1023.320(a)(2) (“SAR Rule”). Broker-dealers are required to file a SAR no later than 
thirty (30) calendar days after the date of the initial detection of facts that may constitute a basis for 
filing a SAR under the SAR Rule. 31 C.F.R. § 1023.320(b)(3). In cases where the broker-dealer 

 
1 “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act “‘means no 
more than that the person charged with the duty knows what he is doing.’” Wonsover v. SEC, 
205 F.3d 408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 
1949)). There is no requirement that the actor “also be aware that he is violating one of the Rules 
or Acts.” Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965). 



 3 

cannot identify a suspect on the date of initial detection, it must file the SAR within sixty (60) 
calendar days of the initial detection of facts that may constitute a basis for filing a SAR. Id.  

5. FinCEN’s instructions for filing SARs throughout the Relevant Period required that 
the SAR narrative contain “a clear, complete, and concise description of the activity, including 
what was unusual or irregular that caused suspicion” and to “include any other information 
necessary to explain the nature and circumstances of the suspicious activity.” FinCEN Suspicious 
Activity Report Electronic Filing Requirements (October 2012 and August 2021). 2 As noted by 
FinCEN, in order to be effective tools and fulfill their intended purpose, SAR narratives must 
generally “identify the five essential elements of information—who? what? when? where? and 
why?—of the suspicious activity being reported” and must include a “summary of the ‘red flags’ 
and suspicious patterns of activity that initiated the SAR.” FinCEN Guidance on Preparing a 
Complete and Sufficient Suspicious Activity Report Narrative (November 2003). 3 FinCEN 
guidance interpreting Section 1023.320 is entitled to deference and when a SAR is filed “it must 
include information about each of the Five Essential Elements of the suspicious activity.” See 
SEC v. Alpine Sec. Corp., 308 F. Supp. 3d 775, 791, 804 (S.D.N.Y. 2018), aff’d 982 F.3d 68 (2d 
Cir. 2020), cert. denied, Alpine Sec. Corp. v. SEC, 142 S. Ct. 461 (2021). When a SAR “lack[s] 
basic information regarding the Five Essential Elements…[the] SAR [i]s deficient as a matter of 
law.” Id. at 800.  

6. Exchange Act Rule 17a-8 requires broker-dealers registered with the Commission 
to comply with the reporting, recordkeeping, and record retention requirements of Chapter X of 
Title 31 of the Code of Federal Regulation, which contains the SAR Rule and other requirements. 
Failing to file complete and sufficient SAR narratives as required by the SAR Rule and the 
FinCEN guidance is a violation of Section 17(a) of the Exchange Act and Rule 17a-8 thereunder. 
See Alpine Sec. Corp., 308 F. Supp. 3d at 798-807.   

Webull’s Policies and Procedures 
 
7. During the Relevant Period, Webull maintained certain written policies and 

procedures relating to its anti-money laundering (“AML”) compliance program and its filing of 
SARs. Among other things, Webull’s policies and procedures stated that Webull would file SARs 
“for transactions that may be indicative of money laundering activity.”  

8. In February 2020, Webull amended its policies and procedures to include:   

FINCEN requires that SAR narratives should contain a chronological and complete 
account of the violation of law in order to explain the nature of the suspicious 
activity. The report should also state in detail Webull’s reason why the transaction 
is illegal or suspicious. The FinCEN guidance also states the following:  

 
2 See 
https://www.fincen.gov/sites/default/files/shared/FinCEN%20SAR%20ElectronicFilingInstructio
ns-%20Stand%20Alone%20doc.pdf. 
3 See https://www.fincen.gov/sites/default/files/shared/sarnarrcompletguidfinal_112003.pdf. 



 4 

• Do not assume the reader is familiar with your institution’s internal 
terminology, acronyms, operational processes, or has other knowledge 
related to the reported violation. 

• The narrative should provide a detailed description of the known or 
suspected suspicious activity  

• Who, what, when, where why, and how should be explained. 
• Indicate if suspect transactions involve other domestic or international 

banks and identify the banks, their locations, account numbers, etc. 
• Provide the relevant facts about all parties facilitating the suspect activity or 

transaction 
• Explain in detail the filer’s position that the activity or transaction is 

suspicious  
• Summarize the report and include any planned or completed follow up 

actions  

Webull’s Deficient SARs 

9. Despite these policies and procedures, throughout the Relevant Period, Webull filed 
SARs that did not contain the information in the SAR narrative as required by FinCEN. Certain of 
Webull’s filed SARs omitted facts identifying the “five essential elements”—namely the “who, 
what, when, where, and why” of the suspicious activity being reported—from the SAR narratives. 
These facts were necessary to make the SAR narratives effective tools and fulfill their intended 
purpose. 

10. For example, in March 2021, Webull filed a SAR in which the narrative referenced 
options trading in two stocks in an account that had been transferred from another broker-dealer 
and stated that the account might be “compromised.” This SAR narrative, however, failed to 
include all of the information as required by FinCEN, including the name of the other broker-
dealer and the date the account was transferred from the other broker-dealer; details about the 
options trading, such as the dates, times, amounts, and prices of the option contracts and purchases 
or sales; why the options trading was suspicious; how the account was compromised and why 
Webull believed it was compromised; and any actions taken by Webull.   

11. In another example, in July 2021, Webull filed a SAR in which the narrative stated 
that a client was trading “illiquid options chains” in a stock and was engaging in potential money 
laundering through three different bank accounts. This SAR narrative, however, failed to include 
all of the information as required by FinCEN, including the account numbers and names of the 
financial institutions that the customer was using for potential money laundering; details about the 
options trading, such as the dates, times, amounts, and prices of the option contracts and purchases 
or sales; why the options trading was suspicious; information about how the customer was 
engaging in money laundering, including the dates and amounts of funds transferred from the 
Webull account to any financial institutions and why this was suspicious; and any actions taken by 
Webull.   

12. As a further example, in December 2022, Webull filed a SAR in which the 
narrative stated that the client had placed multiple orders since the account opened and realized 



 5 

significant profits, the client was located in a foreign country, and that Webull had restricted the 
account due to suspicious activities and a “high probability” of potential insider trading. This SAR 
narrative, however, failed to include all of the information as required by FinCEN, including the 
time-frame of the suspicious trades; details about the trading, such as the identity of the securities 
involved and the dates, times, amounts, and prices of the purchases or sales; why the trading was 
suspicious; and why there was a high probability of insider trading.   

13. As a result of the conduct described above, Webull willfully violated Section 17(a) 
of the Exchange Act and Rule 17a-8 thereunder. 

Webull’s Remedial Efforts and Cooperation  
 
In determining to accept the Offer, the Commission considered remedial acts undertaken by 

Respondent and cooperation afforded the Commission staff.  
 

IV. 
 

Undertakings  
 

Prior to this action, Webull engaged a consultant (the “Compliance Consultant”) to conduct 
a comprehensive review of Respondent’s AML compliance program and the implementation and 
effectiveness of Respondent’s AML policies and procedures, among other areas of focus. The 
Compliance Consultant prepared a report that described the review performed by the Compliance 
Consultant, the names of the individuals who performed the review, the conclusions reached, and 
the Compliance Consultant’s recommendations, including recommendations for changes in or 
improvements to Respondent’s AML program. As part of the remedial measures already in 
progress, and given the nature and scope of the Commission’s claims, Respondent has undertaken 
to:  

A. Within sixty (60) days from the issuance of this Order, at its own cost, adopt all 
recommendations in the written report of the AML Compliance Consultant previously identified to 
the Commission staff (the “Report”), to the extent that any such recommendations have not yet 
been adopted.  

B. Within ninety (90) days from the issuance of this Order, certify in writing to the 
Compliance Consultant and the Commission staff that Respondent has adopted and implemented 
all of the Compliance Consultant’s recommendations in the Report. No later than one hundred 
twenty (120) days after the entry of the Order, the Compliance Consultant shall conduct such 
review as it deems appropriate to verify that Respondent has appropriately implemented the 
recommendations in the Report. Unless otherwise directed by the Commission staff, all reports, 
certifications, and other documents required to be provided to the Commission staff shall be sent to 
Ian S. Karpel, Assistant Regional Director, Denver Regional Office, 1961 Stout Street, Suite 1700, 
Denver, CO 80294.  



 6 

C. Cooperate fully with the Compliance Consultant and provide the Compliance 
Consultant with access to such files, books, records, and personnel as are reasonably requested by 
the Compliance Consultant for review.  

D. Preserve for a period of not less than six (6) years from the end of the fiscal year 
last used, the first two (2) years in an easily accessible place, any record of its compliance with the 
undertakings set forth herein.  

E. Certify, in writing, compliance with its undertakings set forth above. The 
certification shall identify the undertakings, provide written evidence of compliance in the form of 
a narrative, and be supported by exhibits sufficient to demonstrate compliance. The Commission 
staff may make reasonable requests for further evidence of compliance, and Respondent agrees to 
provide such evidence. The certification and supporting materials shall be submitted to Ian S. 
Karpel, Assistant Regional Director, with a copy of the Office of Chief Counsel of the 
Enforcement Division, no later than sixty (60) days from the date of the completion of the 
undertakings.   

For good cause shown, the Commission staff may extend any of the procedural dates 
relating to the undertakings. Deadlines for procedural dates shall be counted in calendar days, 
except that if the last day falls on a weekend or federal holiday, the next business day shall be 
considered the last day.  

The reports by the Compliance Consultant will likely include confidential financial, 
proprietary, competitive business, or commercial information. Public disclosure of the reports 
could discourage cooperation, impede pending or potential government investigations, or 
undermine the objectives of the reporting requirement. For these reasons, among others, the reports 
and the contents thereof are intended to remain and shall remain non-public, except (1) pursuant to 
court order, (2) as agreed to by the parties in writing, (3) to the extent that the Commission 
determines in its sole discretion that disclosure would be in furtherance of the Commission’s 
discharge of its duties and responsibilities, or (4) as otherwise required by law.  

V. 
 
 In view of the foregoing, the Commission deems it appropriate and in the public interest to 
impose the sanctions agreed to in Respondent’s Offer. 
 
 Accordingly, pursuant to Sections 15(b) and 21C of the Exchange Act, it is hereby 
ORDERED that: 
 
 A. Respondent cease and desist from committing or causing any violations and any 
future violations of Section 17(a) of the Exchange Act and Rule 17a-8 promulgated thereunder.    
 

B. Respondent is censured.  

C. Respondent shall, within ten (10) days of the entry of this Order, pay a civil money 
penalty in the amount of $125,000 to the Securities and Exchange Commission for transfer to the 



 7 

general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3). If timely 
payment is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717.   
 
Payment must be made in one of the following ways:   
 

(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  

 
(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  

 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 

 
Payments by check or money order must be accompanied by a cover letter identifying 

Webull as a Respondent in these proceedings, and the file number of these proceedings; a copy of 
the cover letter and check or money order must be sent to Nicholas Heinke, Associate Regional 
Director, Division of Enforcement, Securities and Exchange Commission, 1961 Stout Street, Ste. 
1700, Denver, CO 80294.   
 
 D. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 
treated as penalties paid to the government for all purposes, including all tax purposes. To preserve 
the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor Action, it shall 
not argue that it is entitled to, nor shall it benefit by, offset or reduction of any award of compensatory 
damages by the amount of any part of Respondent’s payment of a civil penalty in this action (“Penalty 
Offset”).  If the court in any Related Investor Action grants such a Penalty Offset, Respondent agrees 
that it shall, within thirty (30) days after entry of a final order granting the Penalty Offset, notify the 
Commission’s counsel in this action and pay the amount of the Penalty Offset to the Securities and 
Exchange Commission.  Such a payment shall not be deemed an additional civil penalty and shall not 
be deemed to change the amount of the civil penalty imposed in this proceeding.  For purposes of this 
paragraph, a “Related Investor Action” means a private damages action brought against Respondent 
by or on behalf of one or more investors based on substantially the same facts as alleged in the Order 
instituted by the Commission in this proceeding.   
 
 
 
 
 

http://www.sec.gov/about/offices/ofm.htm


 8 

E. Respondent shall comply with the undertakings enumerated in Section IV. above. 
 

 By the Commission. 
 
 
 

Vanessa A. Countryman 
        Secretary 


	UNITED STATES OF AMERICA
	In the Matter of
	WEBULL FINANCIAL LLC,
	Respondent.
	Respondent
	V.