In the end, it turns out Sophia actually brought the Pyg to Gotham as part of her plot, making James guilty by association. This was a little weird because a few episodes prior to this, Pyg had rammed a knife through her hand, but I guess that's just commitment to the bid, as actors might say. Sophia then successfully begins to run the criminal underworld until several of her rivals, including Penguin Riddler and Lee Thompson, break her grip