SEC Fines Webull, Two Broker-Dealers for Compliance Failures

Friday, 22/11/2024 | 19:05 GMT by Jared Kirui
  • Lightspeed Financial Services Group, Paulson Investment Company, and Webull Financial agreed to pay the regulator a total of $275,000.
  • The three firms reportedly failed to meet filing standards for suspicious activity reports.
SEC

US-based electronic trading platform Webull is among three companies that settled with the US securities regulator regarding suspicious activity reports that failed to include important and required information.

Webull Financial, Lightspeed Financial Services Group, and Paulson Investment Company, LLC, reportedly agreed to pay the regulator a total of $275,000 for submitting suspicious activity reports that lacked critical information over a four-year period.

Suspicious Activity Reports

The SEC explained in the official announcement of the enforcement action that SARs are tools for law enforcement, offering insights into transactions that may signal illegal activity. Federal law mandates that broker-dealers file SARs explaining transactions deemed unusual or suspicious.

Commenting about the fine, Jason Burt, the Director of the SEC’s Denver Regional Office, said: “Suspicious activity reports play a vital role in keeping our markets safe, and the failure of broker-dealers to include necessary information to explain suspicious transactions deprives law enforcement and regulatory agencies of valuable and timely intelligence, undermining the very purpose of the SARs.”

According to the SEC, the three firms failed to meet this standard between 2018 and 2022, submitting reports with missing or incomplete details. In addition to paying fines, Webull and Paulson agreed to hire compliance consultants to review their anti-money-laundering programs.

Intelligence to Combat Financial Crime

According to the regulator, failure to provide complete and concise information in SARs deprives law enforcement and regulators of valuable intelligence needed to combat financial crime. The investigation was led by the SEC’s Denver Regional Office and involved the Financial Industry Regulatory Authority.

Recently, Webull collaborated with Coinbase to offer crypto futures to US retail investors. The move aims to give traders access to Bitcoin and Ethereum futures. According to Webull, users must open and fund a futures account to begin trading the crypto futures, and the offering is expected to be rolled out to US users in the coming months.

According to the digital investment platform, Webull’s collaboration with Coinbase Derivatives seeks to bridge the gap in the market for retail investors. Futures contracts for Bitcoin, nano Bitcoin, Ethereum, and nano Ether are among the products expected to launch on Webull.

US-based electronic trading platform Webull is among three companies that settled with the US securities regulator regarding suspicious activity reports that failed to include important and required information.

Webull Financial, Lightspeed Financial Services Group, and Paulson Investment Company, LLC, reportedly agreed to pay the regulator a total of $275,000 for submitting suspicious activity reports that lacked critical information over a four-year period.

Suspicious Activity Reports

The SEC explained in the official announcement of the enforcement action that SARs are tools for law enforcement, offering insights into transactions that may signal illegal activity. Federal law mandates that broker-dealers file SARs explaining transactions deemed unusual or suspicious.

Commenting about the fine, Jason Burt, the Director of the SEC’s Denver Regional Office, said: “Suspicious activity reports play a vital role in keeping our markets safe, and the failure of broker-dealers to include necessary information to explain suspicious transactions deprives law enforcement and regulatory agencies of valuable and timely intelligence, undermining the very purpose of the SARs.”

According to the SEC, the three firms failed to meet this standard between 2018 and 2022, submitting reports with missing or incomplete details. In addition to paying fines, Webull and Paulson agreed to hire compliance consultants to review their anti-money-laundering programs.

Intelligence to Combat Financial Crime

According to the regulator, failure to provide complete and concise information in SARs deprives law enforcement and regulators of valuable intelligence needed to combat financial crime. The investigation was led by the SEC’s Denver Regional Office and involved the Financial Industry Regulatory Authority.

Recently, Webull collaborated with Coinbase to offer crypto futures to US retail investors. The move aims to give traders access to Bitcoin and Ethereum futures. According to Webull, users must open and fund a futures account to begin trading the crypto futures, and the offering is expected to be rolled out to US users in the coming months.

According to the digital investment platform, Webull’s collaboration with Coinbase Derivatives seeks to bridge the gap in the market for retail investors. Futures contracts for Bitcoin, nano Bitcoin, Ethereum, and nano Ether are among the products expected to launch on Webull.

About the Author: Jared Kirui
Jared Kirui
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