Webull U.S. customer data access in China questioned

Internal messages between employees of online investing platform Webull suggest a company employee in China had access to information about a U.S. customer, despite the company having said it bars such sharing, according to an analysis of the messages by the House Select Committee on China. 

The analysis comes nearly two weeks after CNBC first detailed the bipartisan select committee’s report that concluded that Webull, which counts 28 million users, is quietly “tied in structural ways” to China’s government, representing a national security threat to American finance.

Webull shares slid more than 19% on the heels of that Oct. 7 report.

At the time of the report, Webull told CNBC in a statement that “U.S. customer data is stored in the U.S. and access to sensitive customer data is controlled by the U.S.” 

But the newly released internal messages by the House Select Committee on China, which CNBC exclusively obtained, raise questions about whether that has always been the case.

The committee has focused on threats posed by China and protecting U.S. industry from Chinese competition.

One message thread suggests a Webull employee was in China during a discussion about a U.S. customer account.

The thread also indicates the account was previously approved by a China Webull team member and an American counterpart.

The messages, dating to 2021, were sent on Microsoft Teams between Brendan Fuller, a manager at Webull’s U.S. brokerage, and an employee named Zhenghan Wang, whose nickname is “Rock.”

The select committee says Wang was likely in China at the time. 

In one message, Fuller messaged Wang about concerns involving a particular trading account. 

“We saw these problems … and approve account,” Fuller wrote. 

Wang replied: “Yes,CIP.”

CIP is an acronym for Customer Identification Program, a U.S. regulatory requirement that financial institutions verify the identities of individuals and entities opening accounts.

“I thought so,” Fuller responded.

Wang asked Fuller: “Who approve the account?” 

Fuller responded: “One China team member and one US team.”  

Wang then asked: “I want to know in what situation (CIP), can we approve the account open?” 

Fuller responded: “I think we just approve them all no matter what …” 

“And then we pay for vendors. And create report and work,” Fuller added.

Wang then replied that “CIP=” followed by Mandarin Chinese characters forming a common phrase that translates as “Exists in name only,” or “Useless.”

A spokesperson for the select committee, in a statement to CNBC, said, “All the evidence in these text messages points to Zhenghan Wang, a Webull employee, being located in China with access to U.S. customer data at the time he worked for the company.”

An analysis by the committee concluded that Wang was in China at the time of the exchange because the messages’ time stamps indicated that Wang was working daytime hours in Beijing, and because he set his software to translate the messages into simplified Chinese. 

A Webull…