Class action alleges Webull misled investors about China operations

A class action accuses Webull of hiding the real scale of its China operations from investors.

A securities complaint filed October 8 in federal court in Tampa, Florida, alleges online broker-dealer Webull Corporation told investors one story about its ties to mainland China while the reality, according to the filing, was very different.

The complaint, Ward v. Webull Corporation et al. (Case No. 8:26-cv-03052), brings claims under federal securities laws - specifically Sections 10(b) and 20(a) of the Securities Exchange Act and SEC Rule 10b-5. It names Webull - a Cayman Islands-incorporated broker-dealer whose shares trade on the Nasdaq under the ticker "BULL" - along with the company's founder and CEO, and its CFO, as defendants.

The company describes itself as a broker-dealer regulated in 12 major markets globally, with US offices in St. Petersburg, Florida.

The case centers on a string of SEC filings the complaint alleges painted an incomplete picture. In its 2024 annual report, a July 2025 registration statement, and its 2025 annual report, Webull told investors its "operations in mainland China are limited to research and development and technical support functions," according to the complaint. Those filings also stated that US 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 complaint alleges those statements were "false and/or misleading." In reality, the filing 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 complaint alleges 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 assurances that its main business operations were US-based.

The numbers in Webull's own filings tell the story. The complaint points to the company's July 2025 registration statement, which 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.

The complaint also alleges that the US House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party delivered a letter to the CEO of Webull Financial - the company's US broker-dealer arm - in December 2024, seeking information about the relationship between Webull Financial and Webull's China operations, and about the security of customer data.

According to the complaint, Webull's SEC filings characterized the Select Committee's concerns as "largely based on outdated and inaccurate information."

That position became harder to hold on October 7, 2026. The complaint alleges that before markets opened, CNBC reported 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," the complaint alleges.

Webull's stock dropped sharply. The complaint alleges the company's Class A ordinary shares fell $1.39 per share - approximately 19% - to close at $5.89 on unusually heavy trading volume.

The complaint alleges 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.

For advisors and compliance teams, this complaint is worth watching. The allegations raise questions about due diligence on broker-dealer platforms with complex cross-border structures - and about what happens when a company's SEC filings and a congressional investigation tell different stories about where operations actually sit.

The allegations in this complaint have not been tested in court. No court has ruled on the merits of the case.