Northstar Financial Services Bermuda

Investors are interested in safe investments that can protect their assets and help them grow. Many investors outside of the US were directed to a Bermuda-based company called Northstar Financial Services (Bermuda).

Frequently sold by US-based brokers, their products offered alleged high commissions with additional incentives to brokers and broker-dealers overshadowed the best interest of the customers. Many of the investors were foreign nationals who lost their life savings.

Unfortunately, the company and its owners are embroiled in a complicated chronicle that has led to criminal charges for the two people involved that cost investors billions. The company is now in liquidation.

Greg Lindberg

The recent news that the US Securities and Exchange Commission (SEC) charged North Carolina-based insurance entrepreneur Greg Lindberg, his company, Northstar Financial Services Bermuda, and one of his investment officers, Christopher Herwig, is no surprise to investors who lost money to them. This action is related to a $75 million fraud conducted with several undisclosed related-party transactions and advisory fees paid to an entity in Malta. Unfortunately, it’s not the first for Lindberg and his various entities.

Owner of a mid-sized conglomerate, Lindberg began investing in insurance companies in 2014, buying several in the U.S., Bermuda and Europe. He then loaned $2 billion in assets from these companies to other companies that he owned. Lindberg was then “living out of the accounts” that borrowed the money and then signed forgiveness on $125 million of the borrowed funds. Northstar Financial Services Bermuda was one of those companies.

Lindberg bought Northstar Financial Services (Bermuda) Ltd. in 2018 through a Bermuda holding company that he owned. The US Department of Justice then indicted Lindberg in 2019 federal wire fraud and bribery charges, and he was convicted in 2020. He was sentenced to seven years in prison but the conviction was later overturned. Currently out of prison, Lindberg is expected to be re-tried this year on federal charges for attempting to bribe the North Carolina insurance commissioner into more favorable conditions for the insurance companies he owned.

Lindberg’s second-in-charge, Herwig, recently pled guilty to a charge of federal criminal conspiracy after he helped Lindberg extract hundreds of millions of dollars from insurance companies owned by Lindberg. This includes the purchase of a mansion in Raleigh, NC intended for Lindberg’s use. Herwig’s trial is scheduled for later this year.

Truist Investment Services

A Latin American family is just one of the many investors that lost money in Northstar. After being introduced to a broker at Truist Investment Services through Sunbank, they were advised to invest in Northstar Financial Services Bermuda.

Despite informing the broker that they were interested in securing their family’s assets, the broker invested nearly 100% of their funds in Northstar Financial Services Bermuda. The broker misinformed the investors that investment in Northstar Financial Services was very safe and the principal would be guaranteed.

The investors allege the broker should have notified the investors that:

In 2011, Moody’s had a negative outlook on Bermuda as a place for investment
Northstar failed to prepare and submit required financial statements, statutory financial returns, capital and solvency returns, declarations of compliance, certificates of compliance and other required documents in both 2018 and 2019, prior to the company’s 2020 bankruptcy
Northstar owner Greg Lindberg was indicted and convicted for bribery and wire fraud in 2020, with the Department of Justice probing his activities in Bermuda in 2018.

This investor has since filed a FINRA arbitration action against the broker and broker dealer over their six-figure losses.

Investor Options

Northstar has little to no assets, and currently has no way to pay back investors. Liquidation and resale of assets can take years, and investors may only see pennies on the dollar. You can still file a lawsuit, or wait to see what the company does. In either case, you may end up with little or nothing anyway.

A better way to recover some of your Northstar investment back is to file for a FINRA arbitration against the broker and/or broker-dealer who recommended and sold these investments.

Any broker-dealer selling investments in the US has an obligation and a responsibility to ensure that any investment they sell is properly vetted, suitable for the investor, and that the broker selling the investment is properly supervised. They must also disclose all possible risks to the investor prior to making the investment.

Many broker-dealers and financial management firms recommended Northstar to investors, including:

Bankoh Investment Services, Inc.,
Cetera Financial
CommunityAmerica Financial Solutions
East West Bank
Hancock Whitney Investment Services
P. Morgan Chase Co.
Morgan Keegan Bank
Ocean Financial Services, LLC (a/k/a Ocean Bank),
Morgan Securities
Raymond James & Associates
Raymond James Financial Services
Trust Investment Services, Inc. (formerly known as Suntrust Investment Services)
Unionbanc Investment Services
United Nations Federal Credit Union (UNFCU)

If you invested in Northstar with one of these broker dealers, you may be able to recover funds with a FINRA arbitration. Investors both in and out of the US may be able to recover investments made in good faith with Northstar Financial Services Bermuda.

Recover Your Northstar (Bermuda) Losses

As with any cases like these, time is of the essence if you hope to recover any of your losses. Silver Law Group already represents clients who have filed claims on behalf of investors against broker-dealers who improperly marketed and sold Northstar (Bermuda), and the firm is continuing to investigate more claims. If you or someone you know invested in any Northstar (Bermuda) offerings, please contact the Silver Law Group toll-free at (800) 975-4345 or e-mail us at ssilver@silverlaw.com for a confidential consultation.