Erez Law is currently investigating former RBC Capital Markets, LLC financial advisor Lisa J. Lowi (CRD # 1347790) regarding recommendations for speculative and unsuitable investment strategies of high risk “junk” oil and gas bonds tied to the energy sector. Lowi was registered with RBC Capital Markets, LLC in West Palm Beach, Florida from 2009 to 2015, and then with Janney Montgomery Scott LLC in Boca Raton, Florida from 2015 to 2016. Lowi is currently not registered with a brokerage firm.
In November 2017, FINRA barred Lowi after she refused to appear for on-the-record testimony in connection with FINRA’s investigation regarding customer complaints and arbitration claims alleging, among other things, unsuitable trading.
Lowi’s former clients allege that she recommended a reckless and unsuitable concentration in speculative energy sector bonds, which were labeled as “junk” bonds at that time. A junk bond is a high-yield and high-risk security. Junk bonds have a speculative nature and a higher default risk and yield in relation to investment-grade bonds with a higher credit ranking. Junk bonds are risky investments that have a speculative appeal because of their high-yield nature. For investors seeking low or moderate risk investments, concentrating an investment portfolio in high risk energy sector bonds is grossly unsuitable and reckless. This strategy can expose investors to companies that were vulnerable to the same adverse market conditions.
It is believed that Lowi may have recommended that her customer invest in the following junk bonds:
- RRI Energy
- Alpha Natural Resources
- Swift Energy Co.
- Linn Energy
- U.S. Steel Corp.
- Sandridge Energy
- Arch Coal Inc.
- Basic Energy Svcs.
Alpha Natural Resources, Swift Energy Co., Linn Energy and Arch Coal filed for bankruptcy. This is not a complete list of all junk bonds sold by RBC brokers, as the volatile energy sector experienced significant turmoil. These and other energy companies were negatively impacted when global crude oil prices fell below $40 per barrel at the end of 2015, the lowest level since early 2009, as supply was in excess of global demand.
Lowi has been the subject of 37 customer complaints, dating from 2004-2017, three of which were denied, two were withdrawn and one was closed without action, according to her CRD report:
- January 2017. “Client alleges the representative was involved as an ‘intermediary or conduit’ in alleged unsuitable (sp) recommendations of energy sector corporate bonds.” The customer is seeking $45,000 in damages and the case is currently pending.
- November 2016. “Clients allege the representative was involved as an “intermediary or conduit” in alleged unsuitable recommendations of energy sector corporate bond investments from 2010 through 2015. As a result of negligent supervision, the Clients had an over concentration in the energy market. They also allege breach of fiduciary duty, negligence, fraud and deceit.” The customer seeks $175,000 in damages, and the case is currently pending.
- October 2016. “Clients claim that they wanted income and principal protection but a majority of their investments were high risk. They request that losses be refunded. Time frame is 2/22/2013 to 8/15/2016.” The customer sought $65,000 in damages and the case was settled for $22,254.98.
- October 2016. “Client alleges the representative was involved as an “intermediary or conduit” in alleged unsuitable recommendations of energy sector corporate bond investments. This is one of numerous cases brought by [Attorney] involving former FA Lisa Lowi.” The customer sought $50,000 in damages and the case was settled for $25,000.
- September 2016. “Clients allege the representative was involved as an “intermediary or conduit” in alleged unsuitable recommendations of energy sector corporate bond investments. This is one of numerous cases brought by Attorney Jason Haselkorn involving former FA Lisa Lowi.” The client seeks damages in the amount of $225,000.
- September 2016. “Client alleges the representative (SP) was involved in alleged unsuitable recommendations of energy sectors (SP) corporate bonds investment.” The case is currently pending.
- September 2016. “Client alleges the representative was involved as an “intermediary or conduit” in alleged unsuitable recommendations of energy sector corporate bond investments. This is one of numerous cases brought by Attorney Jason Haselkorn involving former FA Lisa Lowi.” The client seeks damages in the amount of $400,000.
- September 2016. “Clients allege overconcentration in energy sector corporate bonds, a violation of federal securities laws and breach of contract.” The customer sought $750,000 in damages and the case was settled for $39,500.
- September 2016. “Clients allege over concentration in Energey (SP) sector corporate bonds, a violation of federal securities laws NASD breach of contract.” The customer is seeing $250,000 in damages.
- August 2016. “Clients allege over-concentration in energy sector corporate bonds, in period 2013 to 2015, violation of federal securities laws and breach of contract.” The client sought $498,237.06 in damages and the case was settled for $85,000.
- July 2016. “Clients allege broker recommended unsuitable ‘junk’ bonds, in period 5/2013 to 9/2015. This is one of numerous cases brought by Attorney [Third Party] involving former FA Lisa Lowi.” The customer sought $150,000 in damages and the case was settled for $10,000.
- June 2016. “Clients complain of losses in energy-related bonds and claim that a particular purchase from February 2015 was unauthorized.” The customer sought $59,617 in damages and it was settled for $20,000.
- May 2016. “Claimants allege that the representative was involved as an intermediary or conduit in unsuitable recommendations of energy sector corporate bond investments.” The customer is seeking $275,000 and the case is currently pending.
- May 2016. “Claimants allege that the representative was involved as an intermediary or conduit in unsuitable recommendations of energy sector corporate bond investments.” The customer is seeking $275,000 and the case is currently pending.
- May 2016. “Claimants allege that the representative was involved as an intermediary or conduit in unsuitable recommendations of energy sector corporate bond investments.” The customer is seeking $950,000 and the case is currently pending.
- May 2016. “Claimants allege that the representative was involved as an intermediary or conduit in unsuitable recommendations of energy sector corporate bond investments.” The customer is seeking $75,000 and the case is currently pending.
- April 2016. “Claimants allege that the representative was involved as an intermediary or conduit in unsuitable recommendations of energy sector corporate bond investments.” The customer sought $600,000 and the case was settled for $27,500.
- April 2016. “Claimants allege that the representative was involved as an intermediary or conduit in unsuitable recommendations of energy sector corporate bond investments.” The customer is seeking $350,000 and the case is currently pending.
- April 2016. “Claimants allege that the representative was involved as an intermediary or conduit in unsuitable recommendations of energy sector corporate bond investments.” The customer sought $100,000 and the case was settled for $22,000.
- March 2016. “Claimants allege that the representative was involved as an intermediary or conduit in unsuitable recommendations of energy sector corporate bond investments.” The customer sought $500,000 and the case was settled for $54,500.
- March 2016. “Claimants allege that the representative was involved as an intermediary or conduit in unsuitable recommendations of energy sector corporate bond investments.” The customer sought $325,000 and the case was settled for $62,500.
- March 2016. “Claimants allege that the representative was involved as an intermediary or conduit in unsuitable recommendations of energy sector corporate bond investments.” The customer sought $375,000 and the case is currently pending.
- March 2016. “Claimants allege that the representative was involved as an intermediary or conduit in unsuitable recommendations of energy sector corporate bond investments.” The customer sought $250,000 and the case was settled for $15,000.
- March 2016. “Claimant alleges that the representative was involved as an intermediary or conduit in unsuitable recommendations of energy sector corporate bond investments.” The customer sought $175,000 and the case was settled for $15,000.
- March 2016. “Claimant alleges that the representative was involved as an intermediary or conduit in unsuitable recommendations of energy sector corporate bond investments.” The customer sought $200,000 and the case was settled for $20,000.
- March 2016. “Claimants allege that the representative was involved as an intermediary or conduit in unsuitable recommendations of energy sector corporate bond investments.” The customer is seeking $375,000 and the case is currently pending.
- March 2016. “Clients complain that they wanted only conservative bonds, but their financial advisor recommended that they purchase high yield bonds which subsequently performed poorly. Time frame is 10/2007 to 8/2015.” The customer sought $37,000 in damages and the case was settled for $16,653.75.
- January 2016. “Client verbally complained about poor service and losses she experienced on bonds she purchased on her financial advisor’s recommendation. Time frame 9/12 to 11/15.” The client sought $45,000 in damages and the case was settled for $27,500.
- December 2015. “Third party wrote to express concern regarding losses client incurred on bonds which he believes were not suitable for a conservative investor. Time frame is 11/14 to 11/15.” The case was settled for $65,233.
- September 2015. “Client complains about a loss in a corporate bond and complains that her financial advisor did not advise her to sell the bond. Time frame is 06/13/13 to 09/29/15.” The customer sought $45,003 in damages, and the case was settled for $15,000.
- July 2015. “Client contends that the bond investments in his account are not consistent with his investment objective and risk tolerance.” The case was settled for $10,000.
A broker must have reasonable grounds for each recommendation made to investors considering such factors as the customer’s other securities holdings, financial situation, and risk tolerance. In addition, before a firm offers a security to its customers, the firm must conduct due diligence, investigating the facts surrounding the security, to confirm that it is suitable for any customer of the firm. The suitability of an investment for a particular individual is at the center of the investment process and one of the key duties owed by a firm and its broker to the customer. A firm may be held liable for its failure to recommend suitable investments to its customers.
Brokerage firms typically have compliance rules that deal specifically with the sale of junk bonds. These rules typically state that brokers are only to sell junk bonds to customers that are specifically understand the inherent risks of high risk, high yield “junk” bonds and are interested in aggressive or speculative investments.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, RBC Capital Markets, LLC may be liable for investment or other losses suffered by Lisa J. Lowi customers.
Erez Law represents investors in the United States for claims against former RBC Capital Markets, LLC financial advisor Lisa J. Lowi, regarding recommendations for speculative and unsuitable investment strategies of high risk “junk” oil and gas bonds tied to the energy sector. If you were a client of RBC Capital Markets, LLC or another firm, and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.
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