An arbitration panel in the United States has ordered Truist Investment Services to pay more than $2 million in damages to an investor over losses linked to Northstar Financial Services (Bermuda) Ltd, the failed investment firm at the centre of a long-running international dispute.

The award, issued by Financial Industry Regulatory Authority Dispute Resolution Services, found the brokerage liable for losses tied to Northstar-related products and ordered it to pay $2,003,607 in compensatory damages, along with $701,000 in legal fees and costs, according to a filing seen by The Royal Gazette.

Northstar Financial Services (Bermuda) Ltd went into liquidation in 2020 after failing to meet investor withdrawal requests, leaving a deficit estimated at more than $260 million and triggering a wave of global litigation. Investors have turned to pursuing the brokerage firms that recommended the products, alleging they were mis-sold as safe, income-generating investments.

The liquidation has also prompted litigation in Bermuda, including a Supreme Court ruling on the operation of segregated accounts structures.

The collapse was linked to Greg Lindberg, an American businessman whose wider insurance empire unravelled amid fraud allegations and subsequent criminal convictions in the US.

According to the arbitration filing, the claimant, Elton Simoes, alleged a range of misconduct by the brokerage, including breach of fiduciary duty, negligence and fraud tied to the handling and recommendation of Northstar investments. The firm denied the claims.

The panel, made up of three public arbitrators, ruled in favour of the investor after hearings held this month in Seattle, Washington.

As part of the award, the claimant will retain a partial recovery already distributed through the Bermudian-based liquidation process, while assigning any remaining claim on the Northstar accounts to the respondent.

The decision marks the latest in a series of investor claims tied to the Northstar collapse.