Did Your Broker Sell You Northstar Financial Services (Bermuda) Ltd.?

Silver Law Group has filed claims against several broker-dealers that marketed and sold fixed and variable-rate investments issued by Northstar Financial Services (Bermuda) Ltd. Silver Law Group is continuing to investigate claims that these broker-dealers may have engaged in the unsuitable recommendation of Northstar (Bermuda) products and/or conducted inadequate due diligence on the product. Northstar (Bermuda) was sold by, among others:

• Ocean Financial Services, LLC (a/k/a Ocean Bank)
• Truist Investment Services, Inc. (formerly Suntrust)
• Bankoh Investment Services, Inc.
• Hancock Whitney Investment Services
• Cetera Financial

Brokerage firms owe a duty to their customers to understand and investigate the products they recommend, and to ensure that the securities they recommend are appropriate, or “suitable”, for each individual investor based on age, financial situation and needs, among other factors.

Northstar (Bermuda) was an “offshore” investment marketed and sold to investors living outside the United States. Many of these investors believed that Northsar (Bermuda) was a safe investment, comparable to a certificate of deposit or money market account. Additionally, Northstar was marketed as possessing certain tax benefits not available for US-based investments.

Unfortunately, Northstar (Bermuda) investors may have lost their entire investment. Northstar has entered liquidation proceedings in Bermuda court (similar to bankruptcy in the United States), and a winding up order was issued in March 2021 essentially, calling for the liquidation of the company. The winding up of Northstar presents serious potential issues for investors, who are unlikely to receive their principal investment back.

In July 2018, Northstar was acquired by a company owned by Greg Lindberg, a North Carolina-based insurance entrepreneur. Lindberg—who is now in federal prison for committing wire fraud in connection with the bribery of a North Carolina insurance official—ultimately used his insurance portfolio, which included Northstar (Bermuda) and billions of dollars in other holdings, to engage in self-dealing transactions, purchase luxurious real estate, as well as a private jet and a yacht.

The liquidation petition filed in Bermuda court noted that “within six months of the change of control of the company to Mr. Lindberg, there was a reallocation of the assets of the Companies, with significant assets belonging to the Companies being invested in illiquid equity and debt instruments, mainly in special purpose vehicle structures, under the control of Mr. Lindberg, in the US.” Unfortunately, the petition also noted that as of May 2020, policyholders requested surrenders of approximately $73 million, while Northstar’s cash on hand was only $8.2 million, leaving a substantial shortfall for investors.

We currently represent investors in claims against the selling brokerage firms for lack of due diligence, breach of fiduciary duty, and other claims. These cases are handled on a contingency fee basis and filed against the brokerage firm with FINRA as a securities arbitration claim.

Broker-dealers sold Northstar investments to customers as safe, secure, and liquid. Unfortunately, investors were not informed of the risky nature of these investments, or of the company’s ties to Lindberg. Investors who have scrambled to pull their money out of Northstar have been predominantly unsuccessful.

Our attorneys have represent investors who allege their financial advisor assured them these investments are safe. Investors are now pursuing claims against their financial advisor or their brokerage firm for breach of fiduciary duty, negligence, failure to conduct reasonable due diligence, and other claims.

If you suffered losses and would like a confidential consultation with a securities attorney with passion and experience advocating for aggrieved investors, call Silver Law Group toll free at (800) 975-4345 or email ssilver@silverlaw.com.