The tally of investors seeking compensation from their broker-dealer for losses incurred on account of their unsuitable recommendation of Northstar Financial Services (Bermuda), which has filed for bankruptcy and is undergoing liquidation proceedings. keeps rising. The latest is an elderly investor from Venezuela who is seeking a six-figure sum as compensation from his brokerage firm Truist Investment Services (also known as SunTrust Investment Services).
If you sustained losses in Northstar Financial Services (Bermuda) with Truist, you are advised to contact our experienced investment fraud lawyers today at 1-800-856-3352 to better understand your options.
The claimant’s contention
The investor is contending that his brokerage firm exposed him to risk by investing a substantially large proportion of his savings in Northstar Financial Services (Bermuda), which eventually led to huge losses for him.
He became connected with the broker-dealer as a result of a bank account that he had in the SunTrust Bank in Miami, in which he had parked all his savings. His bank referred him to their connected brokerage firm, Truist Investment Services.
Despite his intention of investing in the US, which he saw as a safe haven, in comparison to the economic turmoil that his own region was beset by, the broker-dealer he was dealing with exposed him all over again to an offshore entity.
Considering that there were comparable US-based products that offered the protection of a well-regulated financial industry in the US, making it less risky, and in view of the fact that he had chosen to bring his savings to the US to escape the risks inherent in the region he lived in, the recommendation appears to be based in unsound logic. The broker he was dealing with apparently reassured him that the product was being recommended as it best met his investment goals.
It must be said, however, that mere recommendations of offshore securities cannot be considered inappropriate. It becomes inappropriate if the circumstances in which it was made indicate other, more suitable options.
Matters came to a head for this investor in 2019 when his attempts to liquidate his holdings in Northstar Financial Services (Bermuda) were met by a letter informing him that his request could not be complied with as redemptions had already exceeded available cash.
Approaching the broker-dealer also did not much help as he was told, falsely as is now apparent, that the issues were temporary and likely to be soon resolved. The financial advisor should have known that Greg Lindberg, the owner of Northstar Financial Services (Bermuda), had already been indicted earlier in the year. Offering platitudes at such a time could be considered to be a falsehood. As a service provider, it would be expected that they would do more to assist the investor.
Northstar has, since unravelled. Lindberg is in prison, convicted of conspiracy to commit wire fraud as well as bribery. Thousand of investors, including many seniors, are struggling with losses and exploring their options.
Broker-dealers are required to convince themselves of the suitability of an investment for a customer before offering it to him. In this case, a straightforward audit would have revealed that this particular investment was not a good fit for this investor.
Why was is sold to him?
Lucrative commissions are the likely reason many broker-dealers pushed through sales of Northstar products that included:
- Global Advantage Select
- Global Index Product
- Global Advantage Plus Series
- Global Interest Accumulator
- Global VIP Elite
- PB Investment Holdings
Lured by the financial gains on offer in the form of sales commissions, many investment advisors appear to have overlooked the suitability of the investment for the investor as a qualifying criterion.
There is no reason why this investor should have been sold this investment in Northstar in the first place, which, even more strangely, then continued to be rolled over.
This gentleman in the claim qualifies as a ‘vulnerable adult’ under the civil code of Florida, where the claim is filed. Truist has been accused of exploitation of elderly persons and disabled adults, apart from neglect and abuse, breach of fiduciary duty, supervisory failures, overconcentration, omissions, misrepresentations, and gross negligence.
Haselkorn & Thibaut (InvestmentFraudLawwyers.com) is also representing several impacted investors from around the world, in their efforts of recovery against brokerage firms for losses incurred on account of unsuitable sales of Northstar investment products.
Our Northstar Financial Services (Bermuda) attorneys have filed a number of FINRA (Financial Industry Regulatory Authority) arbitration claims against several US-based brokerage firms, including Truist, for recovery of investor losses.
If you sustained losses in Northstar Financial Services (Bermuda), you are advised to contact our experienced investment fraud lawyers today at 1-800-856-3352 to better understand your options.