Webull lawsuit: the LIFO tax lot claims and where the case stands
The Webull lawsuit says the broker did not honor customers' LIFO tax lot choice. See the claims, the proposed class and why no money is available yet.
There is no Webull settlement, claim form or payout. The Webull lawsuit, Rose v. Webull Financial LLC, filed Sep 9, 2026 in federal court in New York, says Webull told a customer his account used the LIFO tax lot method, then admitted it had always used FIFO, and that the platform's profit-and-loss figures ignore the method customers choose. A nationwide class of customers who picked LIFO or another non-FIFO method is proposed but not certified, and Webull has not been found liable.
What the Webull lawsuit claims
When you sell part of a position you bought at different prices, a broker has to decide which shares counted as sold. That choice is the tax lot relief method. FIFO (first in, first out) sells the oldest shares first and LIFO (last in, first out) sells the newest first. For an active trader the choice changes the gain or loss on each sale and, the complaint says, account equity and margin limits too.
Plaintiff Devin Rose, a California day trader who opened his account in about Aug 2023 with about $105,000, says Webull let him pick LIFO as his default and confirmed in writing that it was set, including on Jan 31, 2024. On Oct 11, 2024 a Webull representative wrote that his method has always been FIFO since he opened the account, according to the complaint. It also says the platform shows realized profit and loss using a weighted average cost method no matter what a customer picks. Rose says the mismatch caused wrong losses, margin calls and restrictions, and that his account fell to under about $20,000. All of this is allegation, and Webull has not been found liable.
| Method | What it means | Webull default? |
|---|---|---|
| FIFO | First in, first out: the oldest shares are treated as sold first | Yes |
| LIFO | Last in, first out: the newest shares are treated as sold first | No, on request |
| HIFO | Highest-in, first-out | No, on request |
| LOFO | Lowest cost, first out | No, on request |
| MinTax | Minimum tax | No, on request |
The trade examples in the complaint
The complaint gives specific numbers. It says a Roku trade on or about Feb 5, 2024 that should have shown about a $64 loss under LIFO was reported as a $1,061 loss, and that an Arm Holdings round trip on or about Feb 9, 2024 that made about $5,000 showed only about $3,150. Across Arm trades it says FIFO matching cost him $11,058.57 of profit, and that the reported losses set off margin restrictions and forced sales of his remaining positions.
Webull's own Help Center explains the setting this way: FIFO is the default, other methods are available by contacting Webull, a change applies only to future trades, and the method affects only the profit and loss reported on the tax form, while the app shows profit and loss based on average purchase price. That is Webull describing its product, not a response to the lawsuit.
Who is in the proposed class
The complaint proposes a nationwide class: everyone in the United States who had a Webull brokerage account for which a LIFO or other non-FIFO tax lot method was elected or confirmed by Webull, and who sold securities through the platform during the statute-of-limitations period. Customers who stayed on the default FIFO setting are not described as part of it. No class has been certified, so nobody is in or out yet and there is nothing to sign up for.
The claims are breach of contract, breach of the implied covenant of good faith and fair dealing, and fraud. The complaint asks for actual, compensatory and consequential damages, punitive damages, interest and fees, states no total, and says each member's loss could be worked out trade by trade from Webull's own records. If a class is ever certified or a settlement reached, a court notice would explain who qualifies; how to get notified lists ways to hear about it.
Where the case stands
The case was filed in the Southern District of New York as No. 1:26-cv-07784, and Bloomberg Tax reported it the next day. Owed could not read the court docket, so it cannot say which judge has the case. OpenClassActions reported on Sep 23, 2026 that Webull had not responded in court, and no Webull statement about the suit turned up. You can follow the case on Owed's Webull case page.
| Date | What happened |
|---|---|
| About Aug 2023 | Rose opens a Webull account with about $105,000 (as alleged) |
| Jan 31, 2024 | A Webull representative writes that his account's tax lot was updated to LIFO (as alleged) |
| Oct 11, 2024 | A representative writes that his method is FIFO and always has been (as alleged) |
| Sep 9, 2026 | Complaint filed in the Southern District of New York |
| Next | Webull's response to the complaint; no date confirmed |
What could happen next
Brokers often answer a complaint like this with a motion to dismiss, or by asking to move the dispute to arbitration. Brokerage agreements commonly contain arbitration clauses, and the margin account form Webull hosts includes a FINRA arbitration clause that says it will not be enforced against someone in a proposed ("putative") class action until certification is denied, the class is decertified or the customer is excluded. Owed does not know which agreement governs Rose's account, so that is context, not a prediction; our guide to arbitration clauses explains the general idea.
If the case survives, the next fight is over class certification, covered in what happens after a class is certified. A settlement could come at any stage, and class cases commonly take one to three years. Payouts in consumer cases are often small, and many cases end with none. For the full process, see how a class action lawsuit works.
Do not confuse it with other Webull suits
"Webull lawsuit" can mean more than one case. A separate securities suit, Ward v. Webull Corporation, was filed on Oct 8, 2026 in federal court in Tampa, Florida, and is brought for people who bought Webull stock, InvestmentNews reports. It says Webull misstated the extent of its mainland China operations to investors. It has nothing to do with tax lots, and it is also at the complaint stage with no payout.
What to do now
You do not need to file anything, because no claim form exists. If one ever opens, filing directly with the settlement administrator is free. Keep your trade confirmations, tax forms and any chats or emails with Webull support about your lot method, since a class definition like this one turns on account records. Ignore any message offering to claim a "Webull settlement" for a fee; our guide to spotting settlement scams covers the red flags, and a brand you bought got sued explains what to save.
Owed finds the settlements you qualify for, explains them in plain English, opens the official claim form, reminds you before deadlines and tracks your claim to payout. You submit the claim yourself on the official form. Owed Pro is $2 for the first week, then $49 per year — one flat membership. Owed never takes a percentage of any payout. Browse open settlements that do have claim forms, or follow this case. This is general information, not legal advice; the court decides what happens in the case.
Glossary
- Tax lot
- A group of shares bought at the same time and price. Brokers track lots so they can tell which shares you sold.
- FIFO (first in, first out)
- A lot method that treats the oldest shares as sold first. It is Webull's default.
- LIFO (last in, first out)
- A lot method that treats the newest shares as sold first.
- Weighted average cost
- A method that averages the price of all the shares you hold instead of tracking individual lots.
- Class certification
- A judge's ruling that a case can go forward for a whole group. Until then it is only a proposed class action.
- Pre-dispute arbitration clause
- A contract term that sends future disputes to a private arbitrator instead of a court.
FAQ
Yes. Rose v. Webull Financial LLC (No. 1:26-cv-07784) was filed on Sep 9, 2026 in the Southern District of New York as a proposed class action. No class has been certified.
It says Webull let customers choose LIFO as their tax lot method and confirmed the choice, but applied FIFO, and that the platform's profit and loss figures use weighted average cost whatever method a customer picks.
Not now. There is no settlement, no payout and no claim form. If the case settles or a class is certified, a court-approved notice would explain who qualifies.
People in the United States who had a Webull account for which LIFO or another non-FIFO method was elected or confirmed by Webull and who sold securities during the limitations period. Customers on the default FIFO setting are not described as included.
No settlement or claim form turned up for this case or for the separate investor suit, Ward v. Webull Corporation, filed on Oct 8, 2026.
Webull's Help Center says lot method changes go through customer support and apply only to future transactions. Ask support in writing which method your account uses and keep the answer.
- Class action complaint, Rose v. Webull Financial LLC (S.D.N.Y., filed Sep 9, 2026)
- Webull Help Center: Tax Lot Preferences
- Webull customer margin and short account agreement (Apex Clearing form)
- Bloomberg Tax: Webull accused of misleading traders on tax calculation options
- OpenClassActions: Webull LIFO tax lot class action lawsuit
- InvestmentNews: class action alleges Webull misled investors about China operations
This article is based on public information as of Oct 19, 2026; features, prices and deadlines change. Owed is not a law firm and nothing here is legal, tax or financial advice. Corrections →
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