James Y. Lee, La Jolla, California, was charged by the SEC on February 13, 2014, for allegedly defrauding his advisory clients by charging a management fee up to 50% of the client's monthly profits and told clients that he would share 50% of their losses. When the clients lost, he did not reimburse them his share he had promised. These clients were allegedly recruited to open brokerage accounts online with margin accounts in which Lee had discretionary authorization to trade in options. The complaint was filed in the federal district court in San Diego, California.
In addition, the complaint alleges that in February of 2011, Lee charged some of his clients for fees based on losses not gains, which he had concealed from them. Allegedly, Lee never disclosed his background to his clients, including a criminal conviction for embezzlement and his role in an illegal penny stock offering. This complaint also named relief defendants which he had diverted funds to, including his girlfriend, son and a business associate.
Soreide Law Group is currently investigating claims against the various online brokerage firms that provided James Y. Lee a platform to perpetrate this alleged fraud. To speak with a lawyer call: (888) 760-6552.
Moors & Cabot, Inc. (CRD 594) is a brokerage firm based in Boston, Massachusetts. FINRA censured and fined the firm $125,000 after finding it failed to develop and implement an anti-money laundering compliance program reasonably expected to detect and report suspicious transactions, according to an AWC issued August 24, 2026.
Cowen and Company, LLC (CRD 7616), now part of TD Securities (USA) LLC, is a brokerage firm based in New York, New York. FINRA censured and fined the firm a total of $80,000, of which $40,000 is payable to FINRA, according to an AWC issued August 19, 2026.
Webull Financial LLC (CRD 289063) is a brokerage firm based in New York, New York. FINRA censured and fined the firm $115,000 after finding it maintained inaccurate books and records of options order origin codes, according to an AWC issued August 17, 2026.
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