The unraveling of Northstar Financial Services (Bermuda), Limited, has triggered a series of lawsuits by investors against brokerage firms for misrepresentation and unsuitability for selling the company’s insurance and investment products to them. Bankoh Investment Services, a nonbank subsidiary of Bank of Hawaii, SunTrust Investment Services, Inc., and Ocean Financial Services, LLC, are some of the well-known names among US brokerage firms facing these claims. Examples of claims:
- Bankoh Investment Services faces a $900K claim of unsuitability initiated by a client of their Hawaii-based broker Yoko Farias.
- SunTrust Investment Services faces a claim of over $500K initiated by the overseas investors for recovery of losses sustained from Northstar Financial Services investments.
Allegations against brokerages include the presentation of these investments as low-risk and CD-like with a guaranteed monthly income and no risk of erosion of principal. Unfortunately, many investors will lose their principal or at least a part of it.
There is a limited time to file a claim. Investors of Northstar Financial Services Bermuda are encouraged to contact our investment fraud lawyers at 1-800-856-3352 for a free consultation on recovering your losses.
A brief history of Northstar Financial Services Bermuda ltd
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Northstar Financial Services Bermuda Ltd was founded in 1990 and acquired by now-disgraced billionaire Greg Lindberg owned Global Bankers in 2018. Its offshore location in Bermuda made it a tax-friendly investment for many, including Americans. It offered a variety of variable and fixed-rate investment and annuity products that included:
- Global VIP Elite
- Global Advantage Plus Series
- Global Index Product
- Global Advantage Select
- Global Interest Accumulator
Indicted in 2019, Lindberg was convicted in 2020 on charges of wire fraud and bribery and handed a prison sentence of over 7 years. He had attained notoriety for diversion of funds from his insurance and annuity companies to other companies controlled by him. Northstar Financial Services (Bermuda) also received the same treatment, with special purpose vehicles operated by him in the US becoming beneficiaries of assets transferred out of Northstar.
Investors in Northstar Finance Services sought to take defensive action by liquidating their investments when Lindberg’s indictment became known. Not in a position to honor redemption and liquidation requests, which were subsequently suspended, the company eventually filed for bankruptcy protection in 2020. The company is estimated to have incurred a deficit of $260 million, leaving only $8 million in assets on its Balance Sheet by September 2020.
Though the products of the company were not open to American investors, they were open to overseas investors, who were courted and sold these investments by American broker-dealers.
Responsibility of broker-dealers
The Financial Industry Regulatory Authority (FINRA) mandates that broker-dealers perform due diligence on the investment products being sold to clients and satisfy themselves regarding their appropriateness. Additionally, any misrepresentations and even omissions are punishable. In essence, they need to present a truthful and accurate picture to a potential investor, including highlighting the risks.
Each customer is different, with a unique combination of age, risk tolerance, investment horizon, financial goals, etc. It is the responsibility of the broker-dealer as well as their representatives to ensure that proposed investments satisfy the unique needs of each investor.
Apart from misrepresentations and omissions, broker-dealers now face lawsuits variously alleging negligence, failure of supervision, breach of fiduciary duty, and unsuitable recommendations.
Mis-selling, or unsuitable investment advice, unfortunately, is one of the common reasons for investors losing money. FINRA has made available an arbitration process for aggrieved investors, impacted by irresponsible conduct of broker-dealers, to seek redressal.
Investment fraud lawyers at Haselkorn & Thibaut have been at the forefront of the investor battle against brokerage firms and their registered representatives. We have been instrumental in recovering millions of dollars in investor money and have offices throughout the US.
If you or someone that you know has lost money on account of investment in Northstar Financial Services (Bermuda), we encourage you to reach out to one of our investment fraud lawyers for a free consultation. We can be reached at 1-800-856-3352.