California Broker Charged with Defrauding Clients

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.