Cetera Investment Services Named in Chinese Couple’s 7-Figure Beechwood Bermuda Claim
Ex-Cetera Investment Services Broker Xinxin Lu May Have Overconcentrated Couple’s Account in Obscure, Offshore Investment
Our seasoned securities lawyers have filed a Financial Industry Regulatory Authority (FINRA) arbitration case against Cetera Investment Services on behalf of two Chinese investors. These investors seek up to $5M in damages for losses they sustained in Beechwood Bermuda. The claimants, an older couple who have health issues, worked with former Cetera broker Xinxin Lu (also known as Stella Lu).
Beechwood Bermuda (formerly known as PB Life) is a division of Northstar Financial Services (Bermuda). Both are offshore entities that are now defunct and were owned by billionaire Greg Lindberg. He is now in prison for bribery and wire fraud.
Lindberg has a reputation for funneling funds from his insurance and annuity companies to his other entitles and overleveraging his acquisitions. He allegedly likely did the former with both Northstar (Bermuda) and Beechwood Bermuda.
Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) represent dozens of investors in their FINRA arbitration claims against Northstar Financial Services (Bermuda) and Beechwood Bermuda. We are pursuing millions of dollars in financial recovery on behalf of our clients.
Claimants Invested Over $1.5M in Beechwood Bermuda
These investors are Chinese nationals who had a US account with East West Bank, which offers investment services through Cetera Investment Services. This was how the couple was introduced to Xinxin Lu, who worked in California.
The claimants had sought to keep their money safe in the US and wanted principal guarantees. This is what Cetera allegedly promised them, but it is not what happened.
Instead, the firm invested the couple in Beechwood Bermuda and allegedly overconcentrated a huge chunk of their funds —more than $1.5M— in the company. The broker-dealer was paid extremely high commissions and other fees.
Meanwhile, these two investors were never fully apprised of the risks. They also were not informed about the name change to Beechwood, how Lindberg and his Global Bankers had acquired the company in 2018, or that Beechwood filed for bankruptcy protection in 2020.
Cetera Investment Services Should Have Known That Beechwood Bermuda Was Unsuitable for These Customers
It is important to note that this is not a hindsight complaint about recommendations that went bad. Unsuitability was allegedly an issue. These investors had wanted the kind of US-based investment protections that an offshore product could never provide. In their FINRA arbitration claim, they are also alleging:
- Misrepresentations and omissions
- Gross lack of supervision
- Other claims
When these investors did try to get their money back after the terms of their Beechwood investment expired, they were unable to because their assets were frozen. Cetera Investment Services allegedly never bothered to say anything to them even then.
As far back as 2011, credit rating agency Moody’s had already given a negative outlook for Bermuda as a place for investing. Northstar (Bermuda) and Beechwood Bermuda are both unrated by the agency. Investing in either of their products was akin to buying an unrated bond.
Also, for the years ending in 2018 and 2019, Northstar failed to file its statutory financial statements and financial returns. This also included its declarations and certificates of compliance. There is no reason why an experienced financial advisor looking out for these clients’ best interests would recommend that they place all of their assets in this obscure, offshore company.
Ex-Cetera Investment Services broker Xinxin Lu, who is no longer a registered representative, worked just four years in the industry. After leaving the firm in 2017, she was a stockbroker for Transamerica Financial Advisors for less than a year.
Knowledgeable Beechwood Bermuda Investment Lawyers
SSEK Law Firm represents investors from Asia, Latin America, and Central America whose broker-dealers should have never invested them in Beechwood Bermuda or Northstar Financial Services (Bermuda). Already we’ve filed several FINRA arbitration claims against Cetera Investment Services, as well as against many other broker-dealers.
If you suffered investment losses and would like to explore your legal options:
- In the US, call SSEK Law Firm at (800) 259 9010.
- Internationally, via WhatsApp (text only): 713-227-2400