Not upheld: Fraud reimbursement (APP scams) complaint against Webull Securities (UK) Ltd

Decision detail

Summary

Mr J complained that Webull Securities failed to protect him from an investment scam after he purchased shares in company X based on advice from someone posing as an investment tutor, and that the shares subsequently fell in value due to a 'pump and dump' scam. Webull provided an execution-only service and argued they had met their regulatory obligations through risk warnings and scam guidance. The Ombudsman found that Webull took reasonable steps to meet their regulatory requirements, that market manipulation is difficult to detect in real time, and that there is no specific requirement for Webull to reimburse clients for investment scam losses. The complaint was not upheld and no refund was ordered.

The Ombudsman's reasoning

Webull provided an execution-only service with no requirement to assess suitability or challenge investment decisions. They took reasonable steps to meet regulatory requirements including providing prominent risk warnings, explaining their execution-only model, and proactively contacting clients about known scams. Market manipulation is difficult to detect in real time and is typically detected once trading patterns emerge. Webull could rely on the exchange and regulator to detect market abuse. There is no specific requirement for Webull to reimburse clients for investment scam losses in these circumstances, unlike Authorised Push Payment fraud protections.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website