If you suffered investment losses through Webull Financial LLC, you may have grounds to recover your money. According to FINRA regulatory records, the agency has fined Webull over $4.6 million for supervisory failures, options trading approval violations, and inadequate security measures. These regulatory findings provide powerful evidence for investors pursuing claims against the brokerage firm.
At Varnavides Law, we represent investors who have lost money due to broker-dealer negligence and misconduct. Attorney Gary Varnavides spent 10 years at a major securities law firm defending broker-dealers, which means he understands exactly how firms like Webull operate and where their defenses are weakest. Learn more about how we handle investment fraud claims and securities litigation.
Key Takeaways
- FINRA fined Webull $3 million in 2023 for failing to properly approve customers for options trading
- An additional $1.6 million fine in 2025 addressed supervisory failures with influencer marketing
- Investors are pursuing claims for account hacking losses, unauthorized options trading, and pump-and-dump scheme damages
- FINRA arbitration is the primary path to recover investment losses from Webull
- You generally have six years from the date of the violation to file a claim
Understanding Webull’s Regulatory Violations
Webull Financial LLC has faced significant regulatory scrutiny in recent years. You can review the firm’s regulatory history on FINRA BrokerCheck. Understanding these violations helps demonstrate why your claim against the firm may have merit. According to FINRA and SEC records, the firm has paid millions in fines for failures that directly harmed investors.
FINRA’s $3 Million Fine for Options Trading Violations
In March 2023, FINRA sanctioned Webull Financial LLC for multiple serious violations related to options trading and customer complaint handling. The firm agreed to pay a $3 million fine and accept a censure.
FINRA found that between December 2019 and July 2021, Webull failed to exercise reasonable due diligence before approving customers for options trading. The firm’s automated approval system had programming errors that resulted in more than 9,000 accounts being approved for level 1 options trading even though those customers did not meet the firm’s eligibility criteria.
Important: If you were approved for options trading at Webull and suffered losses, the firm’s own regulatory record shows it may not have properly evaluated whether options trading was appropriate for your investment experience and financial situation.
Additionally, FINRA determined that from May 2018 through December 2021, Webull’s supervisory system for identifying and responding to customer complaints was not reasonably designed. The firm failed to commit sufficient staff and resources to handle the hundreds of thousands of customer communications it received, which included complaints about theft and misappropriation.
The $1.6 Million Influencer Marketing Fine
In 2025, FINRA imposed a $1.6 million fine on Webull for additional supervisory failures. Between January 2019 and December 2022, the firm allowed social media influencers to promote its services without reasonable supervisory measures in place.
According to FINRA, influencer posts contained exaggerated claims about investment returns and misrepresented the risks of margin trading. Some posts claimed trading with Webull was “free” without disclosing applicable fees. One influencer even claimed that investing with Webull could turn users into “millionaires.”
| Regulatory Action | Year | Fine Amount | Primary Violations |
|---|---|---|---|
| FINRA Options Trading Fine | 2023 | $3,000,000 | Improper customer approval for options trading |
| FINRA Influencer Marketing Fine | 2025 | $1,600,000 | Failed to supervise influencer promotions |
| SEC SAR Reporting Settlement | 2024 | $125,000 | Filed deficient suspicious activity reports |
| California DFPI Action | 2021 | Administrative | Failed to respond to regulators |
Types of Webull Investment Losses We Handle
Investors have suffered various types of losses through Webull Financial. Our firm handles claims arising from broker negligence, supervisory failures, and securities fraud. Here are the most common types of Webull investment loss claims.
Options Trading Losses
If Webull approved you for options trading without properly evaluating your investment experience and financial situation, you may have a claim for losses resulting from unsuitable options recommendations. FINRA found that over 9,000 accounts were improperly approved for options trading.
Account Security Breach Losses
Investors have filed claims alleging that Webull’s deficient security protocols allowed hackers to access their accounts, liquidate holdings, and use proceeds to manipulate penny stocks. These claims involve broker negligence and breach of fiduciary duty.
Pump-and-Dump Scheme Losses
Some investors lost money when unauthorized parties gained access to their Webull accounts and purchased shares in manipulated penny stocks like Ten-League International Holdings Ltd. (TLIH), which crashed from $7 per share to under $1.
Misleading Promotion Losses
If you opened an account or made investment decisions based on exaggerated claims from Webull’s social media influencers, you may have grounds for a misrepresentation claim. FINRA found influencers made misleading statements about returns and risks.
Legal Grounds for Webull Investment Loss Claims
Successful claims against Webull typically rely on one or more of the following legal theories. FINRA’s regulatory findings provide strong evidence supporting several of these claims.
Broker Negligence
Broker-dealers have a duty to implement reasonable policies and procedures to protect customer accounts and investments. When Webull failed to exercise due diligence in approving options trading or to maintain adequate security protocols, this may constitute actionable negligence.
Failure to Supervise
According to FINRA Rule 3110, broker-dealers must establish and maintain supervisory systems reasonably designed to achieve compliance with securities laws and regulations. FINRA explicitly found that Webull’s supervisory systems were not reasonably designed, which supports failure to supervise claims.
Breach of Fiduciary Duty
When a broker-dealer acts in a capacity that creates a fiduciary relationship with customers, the firm must act in the customer’s best interests. Account security breaches and improper options approvals may constitute breaches of fiduciary duty.
Gary’s Insider Advantage: Attorney Gary Varnavides spent 10 years defending broker-dealers at a major securities law firm. He knows exactly what internal documentation firms maintain, how they train compliance personnel, and where supervisory systems typically fail. This knowledge allows us to build stronger cases for our clients.
Breach of Contract
Your customer agreement with Webull creates contractual obligations. When the firm fails to protect your account or properly evaluate your suitability for certain investment products, this may constitute a breach of contract.
Violations of FINRA Rules
FINRA rules establish standards of conduct for broker-dealers. Violations of rules regarding suitability, supervision, and record-keeping can form the basis for arbitration claims. Webull’s regulatory history demonstrates multiple rule violations.
The FINRA Arbitration Process for Webull Claims
FINRA arbitration is the primary forum for resolving disputes between investors and broker-dealers like Webull. As a FINRA member firm, Webull is required to participate in arbitration when customers file claims.
Why FINRA Arbitration Instead of Court
When you opened your Webull account, you agreed to resolve disputes through FINRA arbitration rather than court litigation. While this limits your options, arbitration offers several advantages for investors with legitimate claims:
- Faster resolution – Most cases conclude within 12-16 months, compared to years in court
- Lower costs – Arbitration fees are typically lower than litigation expenses
- Less formal procedures – Discovery and evidentiary rules are streamlined
- Expert arbitrators – Panels often include industry professionals who understand securities issues
Filing Requirements and Deadlines
To file a FINRA arbitration claim against Webull, you must submit a Statement of Claim describing the dispute, the parties involved, and the damages you seek. According to the FINRA claim filing guide, you must also sign a Submission Agreement and pay the applicable filing fee.
Generally, you have six years from the date of the violation to file a FINRA arbitration claim. However, state statutes of limitations may be shorter depending on the specific legal theories in your case. This is why prompt consultation with a securities attorney is important.
Step 1: Case Evaluation
We review your account statements, trade confirmations, and communications to assess the strength of your claim and potential damages.
Step 2: Claim Preparation
We draft your Statement of Claim, gathering evidence and identifying the specific violations and legal theories supporting recovery.
Step 3: Filing and Discovery
We file your claim with FINRA, Webull responds, and both sides exchange relevant documents and information.
Step 4: Arbitrator Selection
FINRA provides lists of potential arbitrators. We help you select a panel favorable to your case based on their backgrounds and prior decisions.
Step 5: Hearing Preparation
We prepare witness testimony, organize exhibits, and develop arguments to present your case effectively to the arbitration panel.
Step 6: Hearing and Award
We present your case at the arbitration hearing. The panel issues a final, binding award, typically within 30 days of the hearing’s conclusion.
What Damages Can You Recover?
In FINRA arbitration against Webull, you may be able to recover several types of damages depending on the facts of your case.
Compensatory Damages
Compensatory damages restore you to the financial position you would have occupied but for the broker’s misconduct. This typically includes the actual investment losses you suffered, calculated as the difference between what you invested and what you received back.
Consequential Damages
Beyond direct investment losses, you may recover damages for foreseeable consequences of the broker’s misconduct, such as tax liabilities, margin interest, or lost investment opportunities.
Interest
Arbitration panels often award pre-judgment interest on compensatory damages, calculated from the date of the violation to the date of the award.
Costs and Fees
Prevailing claimants may recover arbitration costs, filing fees, and in some cases, attorney’s fees, depending on the circumstances of the case and applicable law.
| Damage Type | Description | Common Examples |
|---|---|---|
| Compensatory | Direct investment losses | Account value decline, unauthorized trades |
| Consequential | Foreseeable secondary losses | Tax penalties, margin interest |
| Interest | Pre-judgment interest | Calculated from violation date |
| Costs | Arbitration expenses | Filing fees, expert witness fees |
Why Choose Varnavides Law for Your Webull Claim
Recovering investment losses requires an attorney who understands how broker-dealers operate from the inside. Gary Varnavides brings unique qualifications to Webull investment loss claims.
10 Years Defending Broker-Dealers
Before founding Varnavides Law, Gary spent a decade at Sichenzia Ross Ference LLP defending broker-dealers against investor claims. He knows how firms like Webull build their defenses and where those defenses are weakest.
Super Lawyers Recognition
Gary has been named a Super Lawyers Rising Star from 2015 through 2023, placing him in the top 2.5% of attorneys in the New York Metro area. This recognition reflects his track record of results for clients.
Licensed in Multiple Jurisdictions
Gary Varnavides is licensed to practice in California and New York, allowing us to represent investors nationwide in FINRA arbitration proceedings against Webull Financial.
The Insider Advantage: When you’ve spent 10 years defending broker-dealers, you learn things most plaintiff’s attorneys never discover. Gary knows what documents firms keep, how compliance departments operate, and which arguments actually move arbitrators. This institutional knowledge translates directly into stronger cases for our clients.
Common Questions About Webull Loss Claims
How long do I have to file a claim against Webull?
FINRA rules generally allow claims to be filed within six years of the violation. However, state statutes of limitations may impose shorter deadlines depending on your specific claims. We recommend consulting with a securities attorney promptly to ensure you do not miss any applicable deadlines.
Can I recover losses from options trading that Webull approved?
Possibly. FINRA found that Webull improperly approved over 9,000 accounts for options trading without adequate due diligence. If you suffered options losses and were approved without proper evaluation of your investment experience and financial situation, you may have grounds for a claim based on unsuitability and failure to supervise.
What if my Webull account was hacked?
Broker-dealers have a duty to implement reasonable security measures to protect customer accounts. If your account was compromised due to deficient security protocols, you may have claims for broker negligence and breach of contract. FINRA arbitration claims are currently pending against Webull for account security breaches.
Do I need documents to file a claim?
Yes, documentation strengthens your claim. We recommend gathering account statements, trade confirmations, any communications with Webull, and records of any complaints you filed. However, even if you have limited documentation, we can often obtain records through the FINRA discovery process.
How much does it cost to pursue a Webull claim?
We handle most investment loss cases on a contingency fee basis, meaning you pay no attorney fees unless we recover money for you. Case costs such as filing fees and expert witnesses are discussed during your free consultation. Contact us to learn more about your specific situation.
What is SIPC protection and does it cover my losses?
The Securities Investor Protection Corporation (SIPC) protects against losses if a brokerage firm fails financially. Webull is a SIPC member, which protects your assets up to $500,000 (including $250,000 for cash) if the firm becomes insolvent. However, SIPC does not cover investment losses due to market fluctuations, unsuitable recommendations, or fraud.
Can I still file a claim if Webull denies wrongdoing?
Yes. In settling FINRA’s charges, Webull consented to the regulatory findings without admitting or denying the allegations. This is standard practice. However, the regulatory findings themselves provide evidence that supports investor claims regardless of the firm’s official position.
How long does FINRA arbitration take?
Most FINRA arbitration cases conclude within 12-16 months from filing. Cases that settle may resolve faster. The timeline depends on factors including the complexity of the case, the number of parties involved, and arbitrator availability.
Time Limits for Filing Webull Claims
Acting promptly protects your ability to recover investment losses. Several deadlines may affect your claim against Webull.
FINRA’s Six-Year Eligibility Rule
FINRA Rule 12206 generally requires that claims be filed within six years of the event giving rise to the dispute. Claims filed after this period may be dismissed as ineligible unless exceptional circumstances apply.
State Statutes of Limitations
Depending on where you live and the legal theories in your case, state statutes of limitations may impose shorter deadlines. For example, fraud claims often have shorter limitation periods than contract claims.
Document Preservation
Broker-dealers are required to maintain certain records for specific periods. The longer you wait to file, the greater the risk that relevant evidence may be destroyed in accordance with retention policies.
Do Not Delay: If you suffered losses through Webull, consult with a securities attorney as soon as possible. Time limits vary depending on your specific situation, and waiting too long may forfeit your right to recover.
Take Action on Your Webull Investment Losses
FINRA’s regulatory findings against Webull demonstrate a pattern of supervisory failures that harmed investors. If you suffered investment losses through Webull Financial LLC, you may have legal options to recover your money. Contact an experienced investment fraud lawyer to discuss your case.
Varnavides Law has the experience and knowledge to evaluate your claim and fight for the recovery you deserve. Attorney Gary Varnavides combines 10 years of broker-dealer defense experience with a commitment to holding negligent firms accountable.
Schedule Your Free Consultation
We offer free, confidential consultations to evaluate your potential claim against Webull. There is no obligation, and most cases are handled on a contingency fee basis, meaning you pay nothing unless we recover money for you.
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