Fraudulent Offerings, Unsuitable Recommendations Linked to Northstar Financial Service (Bermuda)

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As research continues into the extent of Northstar/Global Banker owner Greg Lindberg's wire fraud and bribery conspiracy convictions in 2019, the more key patterns such as unsuitable recommendations and affinity fraud crop up in relation to both Northstar Financial Service (Bermuda) itself, and also with firms and brokers who sold, recommended, or otherwise transacted the problematic products.

As Northstar Bermuda's international sales ring is unearthed, so too are more FINRA-registered brokerage firms that may have sold the products, and done so to investors for whom the products were not suitable. In many cases, brokers and advisers may have recommended or marketed the Northstar Bermuda products without first doing adequate due diligence, and may have even gone so far as to breach their fiduciary duty through excessive sales and aggressive urging for customers to buy the complex and risky Northstar Bermuda offerings.

Cetera Investment Services, Suntrust Investment Services, and JP Morgan Securities headlined a list of FINRA firms previously identified as potentially having sold the flawed Northstar Bermuda investments, a list that also included Raymond James, Ocean Financial, Trust Financial, Hancock Whitney, Unionbanc, and Bankoh Investment Services.

With new arbitration claims and other measures brought against Northstar Bermuda sellers—such as the broker-dealers listed above—from an increasingly international clientele, it is clear that the Northstar Bermuda web was wide and deep.

As for the convicted Northstar Bermuda owner, Lindberg, who is presently serving a prison sentence based on, amongst other charges, attempting to bribe North Carolina Insurance Commissioner Mike Causey through an elaborate scheme, a judge rejected a request to leave federal prison and move to home confinement, purportedly in order to mourn the death of his father in California, where Lindberg was raised. Lindberg previously tried getting out of his prison sentence by requesting a delay until he could get a COVID-19 vaccine, and also asked the court to postpone his report date until after his son was born.

Lindberg's criminal saga here related to a firm called Eli Global (n/k/a Global Growth), with federal prosecutors successfully securing a conviction based on allegations that Lindberg attempted to offer millions of dollars in campaign contributions to Causey in exchange for favors from the NC Department of Insurance.

Former President Donald Trump pardoned another man, ex-NC congressman Robin Hayes, who had previously received a probation sentence for lying to FBI agents about Lindberg's bribery scheme.

Although no direct connection between Northstar Bermuda and the Mike Causey bribe saga has been formally alleged, one might see that millions of dollars were purportedly being moved around behind the scenes all while investors that were tied up in Northstar Bermuda suffered losses.

When the Department of Justice issued its August 19, 2020 press release announcing Lindberg (and Hayes') sentence, Acting Assistant Attorney General Brian C. Rabbitt stated, "Lindberg and his accomplices, driven by greed, devised an extensive political bribery scheme to illegally funnel millions of dollars to an elected official for the benefit of Lindberg’s business interests.

Nonetheless, we return to the matter of lack of due diligence by stockbrokers and their associated firms: if a brokerage firm orĀ  registered representative didn't bother to conduct adequate due diligence into the Northstar Financial Services (Bermuda) offering itself, what (if any) research did they conduct of company itself, or of its owner Greg Lindberg?

If a firm failed to reasonably supervise its employee or associate who made such inappropriate recommendations and transactions—such as failing to detect red flags posed by issues such as over-concentration or selling a complex and risky product to an investor with a "conservative" or low-to-medium risk tolerance preference—the firm could very well be liable for damages.

If you invested with a broker or financial adviser in Northstar Financial Services (Bermuda) with any registered representative, broker, or financial adviser who failed to conduct adequate due diligence, made misrepresentations, or unsuitably recommended this ill-fated product, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.

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