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- Webull closed down 19.09% at $5.89 on Oct. 7 after trading as much as 32% lower in premarket.
- A bipartisan House China committee said Webull's ownership, staff and technology are tied "in structural ways" to China.
- Webull denied the findings on Oct. 8, saying U.S. customer data is stored domestically and the committee never consulted it.
Webull (BULL) shares fell 19% to $5.89 after a House panel called its China ties a national security risk; the broker rejected the report as inaccurate.
Lead
Webull shares posted their worst session in a year on Wednesday, Oct. 7, after the House Select Committee on China released a report describing the brokerage's links to China as a national security risk. In stock market today coverage, the sell-off stood out against a flat tape: the S&P 500 slipped 0.23% and the Nasdaq 0.22%. Volume reached 77.2 million shares, about 459% above the three-month average of 13.8 million, and the market value fell to roughly $3.2 billion.What Did the House Report Say About Webull?
The report, titled "Free Trades, Hidden Ties: Exposing Webull's China Links," concluded that Webull's ownership, technical workforce, technology infrastructure, cross-border data routing, financing and compliance frameworks are tied in structural ways to the People's Republic of China. The investigation was led by Chairman John Moolenaar, a Michigan Republican, and Ranking Member Ro Khanna, a California Democrat.
The committee raised six main concerns:
- U.S. investor data faces surveillance risk.
- Employee locations and supervision were misrepresented.
- China-linked executives dominate governance.
- Regulatory controls are insufficient.
- A Chinese sister company in Hunan received government grants.
- Clearing and custody safeguards are inadequate.
About 62% of Webull's staff is based in China. The panel described a "profound gap" between Webull's marketing as a U.S. firm and how it is controlled.
It also proposed five measures:
- Codify the SEC Cross-Border Task Force.
- Impose inspectability requirements on broker-dealers.
- Add data protections for brokerage records.
- Regulate conflicted clearing arrangements.
- Bring foreign-controlled brokers under review by the Committee on Foreign Investment in the United States.
Why Did Webull Shares Fall So Sharply?
Shares fell because the report raises the prospect of regulatory action against a platform that earns about 90% of its sales from American customers. The stock had already lost about 56% since its 2025 listing, despite a 51% year-over-year rise in sales last quarter, which left little cushion against a policy shock.
Peers also traded lower. Robinhood (HOOD) fell about 2.2% and Interactive Brokers (IBKR) 3.1%, suggesting some concern about wider scrutiny of retail brokers. Several plaintiff law firms announced investigations of Webull on behalf of shareholders after the drop.
How Did Webull Respond?
Webull rejected the findings on Oct. 8, saying the report contains inaccuracies and that the committee did not consult the company before publishing it. The company said its U.S. operations are headquartered in St. Petersburg, Florida, and New York, and that all American customer data is stored domestically under U.S. regulatory controls. It also pointed to its engagement with the SEC and FINRA.
The report does not itself change Webull's legal status. The committee has no direct enforcement power, but its recommendations can feed into legislation or agency action.
Outlook
The next test is whether the SEC, FINRA or other agencies act on the committee's proposals, or whether Webull's rebuttal and disclosures settle the questions about data handling and governance. Until then, Webull faces a stock trading far below its listing level, heavy volume and legal scrutiny. The wider issue is whether foreign-linked brokers face tougher oversight of staffing, data routing and clearing.
Mentioned tickers: BULL, HOOD, IBKR