What Happens If Webull  Goes Out Of Business

What Happens If Webull Goes Bankrupt? (2024)


What happens to client stocks, money, portfolio, and account investments if Webull goes out of business (bankrupt)? Is Webull in financial trouble and could it fail?


Could Webull Go Out of Business?


Webull is a highly popular online broker known for its cost-effective trading, convenient trading platforms, and generous bonus programs. It serves a large number of investors and appears to be financially stable.

Webull is doing very well, but it is good to know what would happen if the broker went bankrupt.


What Happens If Webull Goes Out Of Business?


• Webull has several safeguards in place to protect its customers' assets in the unlikely event of bankruptcy.

• Securities and cash in Webull accounts are protected by the Securities Investor Protection Corporation (SIPC), which covers up to $500,000 in securities and $250,000 in cash per customer. Additional protection is offered through Excess of SIPC coverage, which offers higher coverage limits.

• Uninvested cash that is swept into partnered banks is covered by the Federal Deposit Insurance Corporation (FDIC), each bank offering coverage up to $250,000.


Webull Overview


Webull launched in 2017 as an online broker, offering a commission-free, mobile-first trading experience tailored to new and experienced investors.

Thanks to the broker's innovative technology, Webull was able to amass over eleven million registered users, and it only took three years to reach that milestone. Since then, Webull has grown into one of the most popular online trading apps in the industry.

Today, the broker provides traders with advanced, yet straightforward charting, along with several other useful features such as Level 2 data, and complex options strategies.


Insurance at Webull


Webull offers three types of insurance, including SIPC, Excess of SIPC, and FDIC.

SIPC is designed to protect securities within a brokerage account. If Webull were to go bankrupt, SIPC would intervene and provide protection for the securities and cash balances in Webull's brokerage accounts. Excess of SIPC provides an additional layer of security, offering higher coverage limits.

In certain situations, Webull customers are also protected by FDIC. Like SIPC, FDIC is meant to protect investors from issues originating with their broker. If anything were to happen to Webull, FDIC would provide protection for eligible cash balances.


SIPC


Some of Webull's accounts use Apex Clearing as the custodian (these are being phased out), and some have switched over to the new Webull omnibus accounts. Apex accounts have SIPC and Excess of SIPC, and the omnibus accounts have SIPC coverage.

SIPC covers up to $500,000 in securities, but half that amount can also be used for uninvested cash balances within the brokerage account. Excess of SIPC provides protection for securities and cash up to $150 million. Each customer is entitled to $37.5 million in securities and $900,000 for cash.


Webull bankruptcy


FDIC


Webull's cash management feature is made possible through a cash sweep program. Webull works with several partner banks, each of which is covered by the FDIC. When uninvested cash is swept into these banks, FDIC protection is activated for those funds.

Each bank will cover up to $250,000, and Webull begins sweeping funds into the next bank on the list when the protection limit has been reached.


Could Webull Go Out of Business?


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Updated on 1/20/2024.


Ben Wright
About the Author
Ben Wright is an investor, a trader, an educator, and something of an explorer. He spends his days in the markets when he is not teaching or spending time with his family. Ben writes about stockbrokers, markets, investment vehicles, promotional offers, and tools that help investors make the most of their time in the markets.