Webull, a US-based electronic trading platform, was among three companies that the US securities regulator announced had reached a settlement with the latter over SARs that omitted crucial and mandatory information.
Webull Financial, Lightspeed Financial Services Group, and Paulson Investment Company were said to have settled the regulatory suit for $275,000 for filing suspicious activity reports that lacked some data for four years.
SEC Reported Illegal Activity in Webull
In the official release related to the enforcement action, the SEC said that SARs are enforcement mechanisms providing information about transactions that may indicate unlawful activity. Broker-dealers are required by federal law to submit SARs about transactions considered unusual or suspicious.
Commenting about the fine, Jason Burt, the Director of the SEC’s Denver Regional Office, said: “SARs are essential tools in protecting our markets. Since broker-dealers do not provide all the relevant details on why a transaction looks suspicious, they deny law enforcement and regulatory agencies important intelligence and timely information, thus defeating the purpose of SARs.”
As the SEC said, all three firms did not meet this standard from 2018 to 2022, filing reports with blank or some missing parts. Other than monetary penalties, Webull and Paulson promised to retain compliance consultants to assess their anti-money laundering compliance.
SEC’s Statement On Dealing With Financial Crime
As per the regulator, these omissions in SARs deny police and other regulators the intelligence that they need in their fight against financial crime. The action was pumped by SEC’s Denver regional office and with the assistance of the Financial Industry Regulatory Authority.
Recently, Webull partnered with Coinbase to bring futures for crypto to the US retail investor. The decision will allow disgruntled traders to buy and sell new Bitcoin and Ethereum-based futures. However, Webull suggests that it’s required to open a futures account and fund it to trade crypto futures, this product is planned to be launched for US users in several following months.
As per the digital investment platform Webull, the tie-up with Coinbase Derivatives aims to fill the gap in the market that isn’t served well for the individual investor.