SunTrust Brokers May Have Unsuitably Recommended Northstar Financial Services (Bermuda) to Investors
Customers Claim That Northstar Financial Services Products Were Touted As Low Risk & Safe
If you are an investor who suffered losses while investing in Northstar Financial Services products that were recommended to you by a SunTrust Investment Services stockbroker, please contact Shepherd Smith Edwards and Kantas (SSEK Law Firm investorlawyers.com) today so that we can help you explore your legal options.
Unfortunately, there are financial advisors who may have marketed Northstar Financial Services’ investments as stable, safe, low risk, and liquid – like a CD or a money market account – even when that has proven to be far from the case. Now, Northstar Financial Services is in bankruptcy and undergoing liquidation proceedings. It is very likely that investors have lost most of, if not their entire, investment.
Northstar Financial Services, which is based in Bermuda, offered variable-rate and fixed-rate investments and other annuity-like insurance products to customers, including:
- Global VIP Elite
- Global Advantage Plus Series
- Global Index Product
- Global Advantage Select
Global Interest Accumulator
The company touted how Bermuda regulations and laws would offer certain benefits and tax shelters that investments based in the US could not.
In 2018, Northstar Financial Services was acquired by North Carolina-based Global Bankers. The following year, Global Bankers owner, Kevin Lindberg, was indicted on corruption charges. In March 2020, he was convicted of corruption and attempted bribery.
Lindberg had previously been accused of funnelling funds into other companies that he owned or operated for his own financial benefit. He appears to have done the same with Northstar Financial Services.
Northstar Investors May Have Lost Their Entire Investment
Monthly income payments that were supposed to come from Northstar were suspended and investors who have tried to liquidate their investments have been unable to do so. Not only that but according to court documents, in September 2020 the Bermuda-based firm owed investors more than $70M, while only being able to report $8M in assets, and it may have a $265M deficit.
Other US-based broker-dealers whose registered representatives have been under scrutiny for recommending Northstar Financial Services products to customers include Ocean Financial Services, which is based in Miami, Florida, and Bankoh Investment Services in Hawaii.
Broker-Dealer Negligence and Fraud
Broker-dealers and their registered representatives have a duty to conduct the proper due diligence before recommending any financial product to customers to make sure it isn’t fraudulent. They also must fully apprise prospective investors of any risks involved.
The Financial Industry Regulatory Authority (FINRA) mandates that brokers can only recommend an investment to a customer if it is suitable for the latter’s investment profile, which typically includes their age, financial situation, investing experience, goals, risk tolerance level, other investments, tax status, investing time horizon, and other factors.
An investor who has suffered losses due to the unsuitable recommendation of a broker, because misrepresentations or omissions were made, or an investment proved to be fraudulent can pursue a FINRA arbitration claim against a brokerage firm to recover their losses.