A Truly International Operation: Northstar Financial Services (Bermuda)'s Liquidation Will Result in Significant Losses

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On March 26, 2021, the Supreme Court of Bermuda issued an order against Northstar Financial Services (Bermuda), all but ensuring a liquidation on the heels of bankruptcy that will prove costly to investors, many of whom stand to lose their entire investment in Northstar.  This bad news comes several years after the 2019 conviction of owner Greg E. Lindberg, who was born in San Mateo, California and arrested by the FBI in North Carolina.

The Department of Justice in 2019 indicted Lindberg, the owner of Global Bankers which acquired Northstar Financial in 2018, on counts of wire fraud and bribery. Lindberg consultant John D. Gray was also charged with making false statements to the FBI. DOJ's press release alleged that Lindberg "devised a scheme to defraud" American citizens.

Although Northstar appears to have favored its operations in Bermuda and the United States, many of its associates' histories suggest Northstar was a larger international operation.

Northstar's now-defunct website listed Scott Boug as its CEO and Alejandro Moreno as Executive Vice President, Global Head of Distribution, noting that Moreno holds FINRA licenses.

Alejandro Moreno (CRD #2792823)'s BrokerCheck file indicates a present registration with Foreside Financial Services after prior experience at ERG Securities and Sun Life Financial Distributors.

Northstar's website indicated that several other executives came from Sun Life Financial with a wealth of international experience, including North and South America, the Middle East, Africa, India, and greater Asia:

Sanjeev Chowdury (Senior Vice President, Regional Director and Principal Representative for the Middle East, Africa & India) formerly served as Regional VP for Sun Life International (Bermuda) based in Dubai.

Juan Delgado (VP and Regional Director) served in Sun Life Financial's Internal Division and serviced the North & South American regions.

Joe Machado (Chief Compliance and Operations Officer) worked for Sun Life Financial and held management positions in the Sun life US & International divisions.

Alejandro Moreno (Executive VP, Global Head of Distribution), as previously mentioned, served at Sun Life Financial International as a Key Account Executive for the Americas, and "expanded Sun Life's presence in major distributors of offshore solutions in the Americas," later expanding his role to include the Middle East and Asia.

Another Northstar executive, Christopher Mattera (Executive VP, Operations) brought experience as a JP Morgan Chase Insurance Group VP, as well as a five-year stint developing annuity products at New York Life Insurance Company.

The impressive executive roster at Northstar boasted fluency or working knowledge in a variety of languages, including English, Bengali, French, Hindi, Italian, Portuguese, Punjabi, Spanish, and Urdu.

However, Northstar's products, as its current descent into bankruptcy and liquidation indicate, may not have been suitable for investors to whom they were marketed. A disclaimer on Northstart's now-defunct website warned that its products may run afoul of the laws of the United States and other countries, including Bermuda.

Broker-Dealers must conduct due diligence on any investment and make a reasonable basis determination that the investment is suitable for some class of investors.  This due diligence includes making sure the investment actually exists and is legitimate.  Then, before making the recommendation to purchase the investment to a specific investor, the broker-dealer must determine the investment is suitable for that specific investor's needs.   Failing to meet the reasonable basis and/or investor-specific suitability requirements may be grounds for investors to pursue claims against broker-dealers, their officers and executives, and the stockbroker who sold the investment. 

In other words, if a broker-dealer or financial adviser recommended an investment in Northstar Financial Service (Bermuda)'s offering, the disclaimer of noncompliance of securities laws was a red flag that there may have been no reasonable basis to believe the investment was suitable for any investor.  Even then, that disclaimer was certainly notice that the investor-specific suitability requirement required close scrutiny of the investment compared to the customer's objectives and risk tolerance. 

Importantly, the FINRA suitability rules apply to U.S. broker-dealers even if their clients are not U.S. citizens.  FINRA registered Broker-Dealers that offered Northstar Financial Service (Bermuda) products include, but are not limited to: SunTrust Investment Services, Inc., Bankoh Investment Services, and Ocean Financial Services, LLC.

Some of the Northstar Financial Services (Bermuda)'s Investment products are:

  • Global VIP Elite
  • Global Advantage Plus Series
  • Global Index Product
  • Global Advantage Select
  • Global Interest Accumulator

If you invested with a broker, investment adviser, or brokerage firm who recommended you invest in Northstar Financial Services (Bermuda), and this unsuitable recommendation has proven harmful to your investments or interests through losses or other damages, 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.

All information in the above post was verified as accurate at the time of posting. We invite readers and the subject(s) of the posting to contact us with new or updated information.

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