Investigation into Lisa Lowi Formerly of Janney Montgomery Scott and RBC Capital Markets

Sonn Law Group is continuing their investigation into claims related to former broker Lisa Lowi (CRD#1347790). Lowi was most recently associated with Janney Montgomery Scott LLC (“Janney”) in Boca Raton, Florida having worked there form November 2015 through April 2016. Prior to joining Janney, Lowi was associated with RBC Capital Markets, LLC (“RBC”) in West Palm Beach, Florida from October 2009 through November 2015. Lowi is not currently registered as a broker with any investment firm.

Pending Complaints

Lowi currently has a total of 12 pending customer complaints with the Financial Industry Regulatory Authority (FINRA), eleven of which were made within the past 3 months and all while Lowi was employed with RBC, including:

1. an approximate $350,000 arbitration claim for damages based on allegations of Lowi behaving as a conduit or intermediary in unsuitable recommendations of energy sector corporate bond investments filed on April 5, 2016;
2. an approximate $300,000 arbitration claim for damages based on allegations of Lowi behaving as a conduit or intermediary in unsuitable recommendations of energy sector corporate bond investments filed on March 15, 2016;
3. an approximate $375,000 arbitration claim for damages based on allegations of Lowi behaving as a conduit or intermediary in unsuitable recommendations of energy sector corporate bond investments filed on March 15, 2016;
4. an approximate $200,000 arbitration claim for damages based on allegations of Lowi behaving as a conduit or intermediary in unsuitable recommendations of energy sector corporate bond investments filed on March 16, 2016;
5. an approximate $175,000 arbitration claim for damages based on allegations of Lowi behaving as a conduit or intermediary in unsuitable recommendations of energy sector corporate bond investments filed on March 16, 2016;
6. an approximate $325,000 arbitration claim for damages based on allegations of Lowi behaving as a conduit or intermediary in unsuitable recommendations of energy sector corporate bond investments filed on March 22, 2016;
7. an approximate $450,000 arbitration claim for damages based on allegations of Lowi behaving as a conduit or intermediary in unsuitable recommendations of energy sector corporate bond investments filed on March 23, 2016;
8. an approximate $500,000 arbitration claim for damages based on allegations of Lowi behaving as a conduit or intermediary in unsuitable recommendations of energy sector corporate bond investments filed on March 21, 2016;
9. an approximate $250,000 arbitration claim for damages based on allegations of Lowi behaving as a conduit or intermediary in unsuitable recommendations of energy sector corporate bond investments filed on March 16, 2016;
10. an approximate $100,000 arbitration claim for damages based on allegations of Lowi behaving as a conduit or intermediary in unsuitable recommendations of energy sector corporate bond investments filed on April 4, 2016;
11. an approximate $375,000 arbitration claim for damages based on allegations of Lowi behaving as a conduit or intermediary in unsuitable recommendations of energy sector corporate bond investments filed on March 15, 2016; and
12. a $68,570 claim for damages based on allegations of unsuitable recommendations and undisclosed risks regarding municipal debt received by FINRA on February 25, 2015 which evolved into a pending arbitration claim.

Closed Complaints

In addition to the aforementioned 12 open complaints, Lowi had 8 prior complaints that have been resolved, including:

1. a complaint with alleged damages of $37,000 based on allegations that Lowi recommended high yield bonds after customers requested conservative bonds received by FINRA on March 11, 2016 and settled the same day for $16,653.75;
2. a complaint with unspecified damages based on allegations of unsuitable investments received by FINRA on December 23, 2015 settled on January 7, 2016 for $65,233.50;
3. a verbal complaint with alleged damages of $45,000 based on allegations of poor service and corporate bond losses was received by FINRA on January 4, 2016 and settled the same day for $27,500;
4. a complaint with alleged damages of $45,003 based on allegations that Lowi did not advise a client to sell a corporate bond that was performing poorly received by FINRA on September 29, 2015 and settled for $15,000 on January 4, 2016;
5. a complaint with unspecified damages based on allegations of unsuitable corporate and municipal bond investments received by FINRA on July 11, 2015 and settled for $10,000 on September 8, 2015;
6. a complaint with unspecified damages based on allegations of poor service and unsuitable investments received by FINRA on December 14, 2015 and withdrawn on February 8, 2016;
7. a complaint with unspecified damaged based on an allegation of failure to disclose the backing behind a new issue municipal bond was received by FINRA on September 25, 2008 and denied on October 2008. It was determined that the damages would not exceed $5,000 if the allegations were true; and
8. a complaint with unspecified damages based on allegations of improper solicitation to exchange a life insurance policy for a variable annuity received on June 25, 2004 and closed on June 26, 2006. It was determined that the damages would not exceed $5,000 if the allegations were true.

What Does a High Number of Customer Complaints Mean?

A recent study showed that brokers who have disclosures for misconduct are five times more likely to end up with future, similar marks on their records. Disclosures can include anything from bankruptcies, personal tax liens, and customer disputes with brokers. The study defined misconduct as regulatory actions, a job change following an allegation, customer disputes with awards, completed civil actions, and settled customer complaints. The study also included settled customer complaints in the definition of misconduct based on the observation that, even where a broker’s complaint was dismissed or dropped, the likelihood of future disclosures still increased five-fold.

Just over 7% of brokers have disclosures on their records. Considering most brokers have no disclosures on their records and there is a process to expunge, or erase, certain disclosures from their records, the 20 misconduct disclosures on Lowi’s record is an exceptionally high number.

Interestingly, another recent study reflects that the risk of broker misconduct is increased significantly if the broker has co-workers who have previously committed misconduct. Lowi had a co-worker named Paul Blum (CRD#735003) who worked during the exact same span of time at RBC and who is the also the subject of a current Sonn Law Group investigation. Blum has 8 current complaints and 8 closed complaints and is also no longer associated with any investment firm.

The aforementioned studies reflect that when brokers have customer complaints, they are not necessarily pushed out of the industry. Rather, the labor market and regulatory environment move these brokers to firms with looser hiring practices and compliance.

The Financial Industry Regulatory Authority (“FINRA”) holds brokerage firms to high standards. A brokerage firm must have a reasonable basis to believe that a transaction is the right fit for you based on their awareness and understanding of your investment profile. The brokerage firm must consider your age, other investments, investment objectives, investment experience, risk tolerance, investment time horizon, liquidity needs, and the like. A broker can be held liable for making unsuitable investment recommendations. Recommendations must be suitable. Member brokerage firms are also barred from presenting misleading information to get you to buy or sell an investment.

Further, FINRA member firms are responsible for the supervision of a broker’s activities while the broker is registered with their firm. Therefore, Janney Montgomery Scott LLC and/or RBC Capital Markets, LLC may be liable for investment or other losses suffered by Lowi’s customers.

If you were a client of Janney Montgomery Scott LLC, RBC Capital Markets, LLC, Lisa Lowi or Paul Blum and have experienced investment losses or irregularities in your investment accounts, please call Sonn Law Group at 844-689-5754 or click here to access our contact form. Sonn Law Group is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies.