Lockie, 28, is accused of calling two men 'black f******' while at a pool party in Chigwell, Essex.
Although the men involved have made no formal complaint regarding the allegations against Lockie, it is thought fellow partygoers alerted producers of the ITVBe reality show.
A source told The Sun: "The cast member concerned denies these allegations. Any issues of this nature are obviously taken very seriously and a thorough investigation is already in place."
This is not the first time Lockie has been in trouble with the show. In July last year, he was suspended after pleading guilty to possession of a class C drug.
After admitting to possessing Ketamine and appearing in court, Lockie was allowed to return to the show.
A source at the time told the Mirror: "Despite James pleading guilty to possession, no drugs were found in his system.
"And the courts even noticed James' good behaviour and the fact that he had no previous convictions, so producers took that into account.
"He showed great remorse for his actions, which was really important to ITV2."