If you purchased an investment product from Northstar Financial Services (Bermuda), you are likely already aware of the bad news: the company is in liquidation, redemption requests are frozen, and your principal is at serious risk.
What you may not know is that you might have a path to recover your losses—not from the bankrupt company in Bermuda, but from the U.S.-based brokerage firm that sold you the product in the first place.
Many investors, particularly foreign nationals who sought a safe haven for their savings, were sold Northstar Bermuda products as conservative, “CD-like” investments with guaranteed principal protection. Instead, they were sold a high-risk, illiquid product that has now left them with substantial losses.
If this sounds like your story, you are not alone, and you may have a claim for FINRA arbitration.
What Happened to Northstar Bermuda?
Northstar Financial Services (Bermuda) Ltd. was a Bermuda-based company that offered fixed-rate and variable annuities. For years, it was marketed to international investors as a way to hold assets in a tax-advantaged, regulated structure.
However, the situation changed drastically after the company was acquired by Global Bankers, a conglomerate owned by Greg Lindberg. Following the acquisition, it is alleged that Northstar’s assets were funneled into other companies controlled by Lindberg—companies that were often illiquid and speculative.
- The Collapse: In 2020, Northstar Bermuda entered liquidation proceedings after failing to meet redemption requests.
- The Fraud Conviction: Greg Lindberg was indicted and convicted on federal wire fraud and bribery charges (related to his insurance empire), casting a long shadow over the solvency of his companies, including Northstar.
- The Liquidity Crisis: Investors who attempted to withdraw their money found that the company simply did not have the cash to pay them.
Why Do You Have a Claim?
You might be thinking, “The company went bankrupt; that’s just a market risk.” That is likely incorrect.
The core of a securities claim often rests on the concept of Suitability. Financial advisors and brokerage firms have a legal and regulatory duty to only recommend investments that are appropriate for your risk tolerance and financial goals.
Duty, Breach, Cause, and Harm:
To understand if you have a case, we look at the four elements of a claim:
- Duty: Your financial advisor had a duty to conduct due diligence on Northstar Bermuda. They had a duty to know that after the Lindberg acquisition, the risk profile of the company had skyrocketed.
- Breach: If your advisor continued to sell Northstar as a “safe,” “guaranteed,” or “low-risk” investment akin to a CD or money market fund after the red flags appeared, they may have breached that duty.
- Cause: You invested your money based on that recommendation.
- Harm: You are now facing the loss of your principal or the inability to access your funds.
Did your broker tell you that Northstar was owned by a man under federal indictment? Did they explain that the assets backing your “guaranteed” investment were actually loans to the owner’s other struggling companies? If not, there was a failure to disclose material facts.
US Brokerage Firms May Be Liable
Many major U.S. brokerage firms sold Northstar Bermuda products to their clients, earning high commissions in the process. These firms include:
- Cetera Investment Services
- Ocean Financial Services
- Truist Investment Services (SunTrust)
- Bankoh Investment Services
- And others…
These firms had a responsibility to supervise their brokers and vet the products on their platform. If they failed to do so, they can be held liable for your losses through FINRA Arbitration.
What Is FINRA Arbitration?
You do not need to sue Northstar in a Bermuda court to get your money back. In fact, that road is likely a dead end.
Instead, you can file a claim through the Financial Industry Regulatory Authority (FINRA) against the U.S. brokerage firm that sold you the product. This is a dispute resolution process designed specifically for investors. It is generally faster and less formal than a court trial.
Do you dare sue your broker?
Yes. The system exists to protect investors like you. If your broker breached their duty and caused you harm, you have every right to seek recovery.
We Can Help
At The Securities Lawyers, we specialize in recovering losses for investors who were misled by their financial advisors. We work on a contingency fee basis, which means we only get paid if we recover money for you. You take no financial risk in asking us to review your case.
Don’t let your broker’s negligence cost you your life savings.
Sean M. Sweeney is a shareholder at Halling and Cayo, a full service law firm in Milwaukee, WI and the head of its Securities Litigation team.
He represents individual and institutional investors in FINRA arbitration and court nationwide. He recovers investment losses from fraud or breach of duty from their broker-dealer.
Contact him at (414) 755-5020 or via e-mail at SMS@hallingcayo.com to see if he can help recover your funds.