In a world of no-fee and low-fee brokers, robinhood is the leaderBut it faces stiff competition from an upstart called Webull, founded by one of the top executives of China-based e-commerce giant Alibaba.
and its Webull’s relationship with China – which is increasingly being seen as a US rival – which could pose a major hurdle to the company’s ambitious expansion plans, The Post has learned.
As The Post reported, Congress is seeking information about how US securities regulators are monitoring the security of Webull’s customer data.
Now a group of attorneys general from red states has launched an investigation into the company’s ties to the mainland and its ruling Chinese Communist Party, or CCP.
the incoming Trump administration, and The China skeptics they have nominated I’m told Marco Rubio as Secretary of State, Matt Gaetz as AG, and whoever gets approved for Treasury will likely heat up even more. The interest from various government entities comes amid apparent delays in Webull’s plans to list on Nasdaq through a special purpose acquisition company, or SPAC, people close to the matter say.
A spokesperson for Webull and the firm’s outside counsel in WilmerHale, D.C., did not respond to multiple emails and calls seeking comment.
These concerns echo some of the issues US regulators have had with China-owned hugely popular short-video app TikTok — concerns that the CCP is stealing user data for spying purposes as the surveillance state there stalks basically every company on its soil. Controls.
Both Republicans and Democrats have debated for years over whether to ban TikTok, as they are concerned about the potential for identity theft, with the CCP collecting the “biometric identifiers” and search history of its 170 million American users. Is.
harsh treatment
In 2021, Trump left office before he could do anything concrete with TikTok. (He negotiated a forced sale to Oracle, an American company run by his friend Larry Ellison, which was never completed). Joe Biden actually signed a TikTok ban that was set to go into effect in January, one day before he left office.
Now that Trump has returned to D.C., he has, at least rhetorically, wooed his early foe, trying to win over the young voters who form the core of its user base. TikTok may get a pardon from Trump as he sees it as the lesser of two evils in the social-media sphere that is being strangled by Mark Zuckerberg’s progressive and MAGA-content Facebook. (Representatives for TikTok and the Trump transition team did not respond to requests for comment.)
Webull could face tough treatment by both the new administration and the GOP-controlled House and Senate because of the type of information it can collect from customers. TikTok’s alleged monitoring of biometric identifiers seems a bit strange. On the other hand, when you open a brokerage account, you are obviously handing over sensitive personal information like Social Security numbers, which could be used for more nefarious spying schemes.
And Webull is opening a large number of US-based brokerage accounts. Research from multiple sources shows that Robinhood controls the largest share of the no-fee, low-fee brokerage market, while Webull is making significant inroads domestically. Traders say that it offers quite sophisticated investing tools, its analytics are good and the platform runs quite smoothly.
AG is investigating
Like TikTok, Webull has denied misusing customer data, although US officials disagree. In April, Red State AG, led by Todd Rokita of Indiana, wrote a letter to the company’s lawyers demanding accurate details of ownership. Rokita and his fellow prosecutors sent a second on October 9, claiming the company was hindering their investigation.
“Webull’s June 2024 response does little to reassure us that the company takes the privacy of its US customers’ data seriously and that personal data cannot be accessed or compromised by the CCP or PRC. [People’s Republic of China]” said the letter obtained by The Post.
“Indeed, the apparent omission of important information from Webull’s response raises many new questions and concerns. Protecting the sensitive personal and financial data of US customers is of the utmost importance, and Webull’s full cooperation in our investigation is essential for us to ensure that such data is not improperly disclosed by foreign actors or They have not been accessed.
In the past, Webull itself has offered vague descriptions of Chinese involvement in the company. Anthony Denyer, CEO of its US unit, told The Wall Street Journal in 2019 that Webull “is both an American and a Chinese company.”
The American portion has not been sold, Rokita said in his letter.
“Webull appears to have an associated research and development facility (‘R&D Facility’) with hundreds of employees in Changsha, China. “SEC filings indicate that the R&D facility may provide services or support to Webull’s US brokerage operations,” the letter said.
He said Webull’s initial responses to the AG’s inquiry “failed to discuss at least 13 individuals identified as current or former registered representatives of Webull on FINRA’s BrokerCheck website, who appear to be Chinese nationals based in Changsha, China.” Are.”
The post revealed that Webull had asked if he could get time till December 11 to provide the necessary information to satisfy Rokita’s letter. A Rokita spokesperson said: “Even though they are not giving us any answers, we are continuing to put pressure on them.”
