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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?
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Could Webull Go Out of Business?
Webull is a well-known online broker praised for its low-cost trading, easy-to-use platforms, and attractive bonus offers. It has a large user base and is financially sound.
Although Webull is performing well, it's wise to know what would happen if the broker were to go bankrupt.
What Happens If Webull Goes Out Of Business?
• Webull has many protections in place to safeguard 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. There is also Excess of SIPC coverage, which provides higher coverage limits.
• Any uninvested cash that is swept into partner banks is covered by the Federal Deposit Insurance Corporation (FDIC), with each bank offering coverage up to $250,000.
Webull Overview
Webull launched in 2017 as an online brokerage, offering commission-free, mobile-first trading platforms designed for both novice and seasoned investors.
Thanks to its innovative technology, Webull quickly grew to over eleven million registered users within just three years. Today, it's one of the top online trading platforms, providing users with advanced yet user-friendly charting tools, Level 2 data, and complex options strategies.
Insurance at Webull
Webull offers three types of insurance: SIPC, Excess of SIPC, and FDIC.
SIPC protects securities within brokerage accounts. If Webull were to fail, SIPC would step in to safeguard securities and cash balances in Webull's brokerage accounts. Excess of SIPC adds an additional layer of security, offering higher coverage limits.
FDIC protection also applies in certain cases. It's designed to protect investors from broker-related issues. If something happens to Webull, FDIC would cover eligible cash balances.
SIPC
Webull's accounts might use Apex Clearing as the custodian (though these are being phased out) and others might be part of the new Webull omnibus accounts. Both Apex and omnibus accounts include SIPC coverage.
SIPC protects up to $500,000 in securities, with half of that amount also available for uninvested cash balances within the brokerage account. Excess of SIPC coverage extends up to $150 million in securities and cash, with a cap of $37.5 million in securities and $900,000 for cash per customer.
FDIC
Webull's cash management feature includes a cash sweep program that works with several partner banks, each protected by FDIC. When uninvested cash is swept into these banks, it's covered by FDIC insurance.
Each bank covers up to $250,000, and Webull moves funds to the next bank when the protection limit is reached.
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Updated on 7/5/2024.
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.
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