A securities class action filed October 8 in the U.S. District Court for the Middle District of Florida alleges that Webull Corporation misled investors about the extent of its operations in mainland China. The complaint, Ward v. Webull Corporation et al. (Case No. 8:26-cv-03052), asserts violations of Sections 10(b) and 20(a) of the Securities Exchange Act and SEC Rule 10b-5. Named as defendants are Webull—a Cayman Islands-incorporated broker-dealer trading on the Nasdaq under the ticker "BULL"—along with its founder and CEO and its CFO.
Webull, which describes itself as a broker-dealer regulated in 12 major markets with U.S. offices in St. Petersburg, Florida, has seen its stock tumble following the allegations. The complaint centers on a series of SEC filings—including its 2024 annual report, a July 2025 registration statement, and its 2025 annual report—that stated its "operations in mainland China are limited to research and development and technical support functions." Those filings also assured investors that U.S. customer data "cannot be transmitted outside of the United States or accessed by our non-U.S. employees without permission and oversight from our U.S. personnel."
The lawsuit alleges those statements were "false and/or misleading." In reality, the complaint claims, "Webull's core platform, software development, data pipelines, and core engineering depended on PRC-based personnel and on technology infrastructure subject to Chinese law." More broadly, the filing asserts that "Webull's ownership structure, technical workforce, technology infrastructure, cross-border data routing, financing, and compliance structure were structurally tied to China," contradicting the company's public assurances that its primary operations were U.S.-based.
Webull's own filings provide the numerical backdrop. The July 2025 registration statement disclosed that its mainland China subsidiary, Hunan Weibu Information Technology Co., Ltd., "employs 731 employees, representing 61% of our employees as of December 31, 2024." By the end of 2025, the complaint alleges, that figure had climbed to 863 employees—62% of Webull's global workforce. These numbers, the plaintiffs argue, undercut the company's characterization of its China presence as merely ancillary.
The complaint also highlights a December 2024 letter from the U.S. House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party to the CEO of Webull Financial, the company's U.S. broker-dealer arm. The committee sought information about the relationship between Webull Financial and Webull's China operations, as well as the security of customer data. According to the complaint, Webull's SEC filings dismissed the committee's concerns as "largely based on outdated and inaccurate information."
That position became untenable on October 7, 2026, when CNBC reported that the Select Committee had found a "profound gap" between how Webull presented itself as an American company and its actual control and operations. The committee also reportedly found that Webull "initially told the Select Committee that it had no offices or employees in China," according to the complaint. The news triggered a sharp sell-off: Webull's Class A ordinary shares fell $1.39, or approximately 19%, to close at $5.89 on unusually heavy volume.
The complaint alleges that the company's founder and CEO—a citizen of the People's Republic of China who, as of March 31, 2026, held approximately 79.2% of total voting power—"knew or recklessly disregarded" the extent of Webull's dependence on China-based operations. The plaintiffs seek class certification, damages, and equitable relief.
For advisors and compliance teams, this case underscores the importance of due diligence on broker-dealer platforms with complex cross-border structures. The allegations raise questions about what happens when a company's SEC filings and a congressional investigation tell different stories about where operations actually sit. As similar disputes have shown—such as the Netcapital class action and the SEC's case against Global Tech's ex-CEO—regulatory scrutiny can quickly translate into market losses. The Webull complaint also echoes concerns raised in FINRA's study on investor risk comprehension, highlighting the gap between corporate disclosures and investor understanding.
As the case proceeds, advisors may want to monitor how Webull responds to the allegations and whether the SEC or other regulators take action. The outcome could have implications for how broker-dealers with overseas operations disclose their reliance on foreign personnel and infrastructure, particularly in the current geopolitical climate.
