Financial adviser in Petaluma settles with SEC for $2.2 million

A Petaluma financial adviser has been ordered to repay over $2.2 million as part of a settlement issued by the Securities and Exchange Commission after being accused of misappropriating millions of dollars from clients. James Burleson, 58, the founder of Petaluma-based Burleson & Company, LLC, was charged in November 2024 with defrauding clients of more than $3 million while retaining $1.8 million for himself. The allegations against Burleson involved a deceptive scheme known as “cherry-picking,” where he selectively allocated profitable trades to his personal accounts and unprofitable ones to his clients’ accounts.

In an August 8 settlement, the SEC directed Burleson to repay over $2.2 million, with $1.8 million going back to clients, along with $200,000 in interest, and a $230,000 penalty for violating federal securities laws. Additionally, Burleson is prohibited from holding certain positions within the investment industry for the next five years, with the option to reapply at the end of the period, subject to compliance with the settlement terms.

Between August 2020 and October 2022, Burleson allegedly engaged in risky stock options using client accounts, manipulating profitable trades to benefit himself while causing losses to his clients, resulting in a significant financial gain for him. The SEC reported profits of $1.8 million for Burleson, with corresponding losses of $3.2 million affecting client accounts. These returns were deemed statistically improbable, with less than a one in a million chance of occurring naturally.

Burleson managed a client base of over 200 individuals, with 29 clients directly affected by his actions, as reported in the original complaint. At the time of the allegations, his firm oversaw assets totaling over $430 million, highlighting the scale of the deception perpetrated by the financial adviser.

The deceptive nature of cherry-picking was emphasized in the complaint, noting how clients are reliant on the integrity and fiduciary duty of their adviser to act in their best interests. Detection of such fraudulent activities is challenging for clients, underscoring the importance of ethical conduct within the financial advisory sector.

Instances of preferential trading activities were first identified by representatives at Charles Schwab & Co., prompting an investigation that led to the termination of Burleson’s relationship with the firm in November 2022. The SEC’s investigation shed light on the illicit practices of the Petaluma-based financial adviser, ultimately resulting in the significant settlement imposed on Burleson in August 2025.