Litigants lining up to sue over Northstar Bermuda
American lawyers are advising international investors to sue over a failed Bermuda investment company.
The failure of Northstar Financial Services (Bermuda) is related to a jailed billionaire investor in the US, and the sudden halting of the company’s operations in Hamilton.
Litigation is lining up against brokerage firms who recommended participation in Northstar investment products.
A Japanese investor is one of the latest reportedly seeking massive compensation from the brokerage that sold her on the Bermuda company.
Her legal representatives are Houston-based securities lawyers Shepherd Smith Edwards & Kantas LLP.
She has claimed a six-figure loss in the $500-thousand FINRA arbitration case she has filed against Bancwest Investment Services.
She contends her Bancwest Investment Services broker proposed a Northstar investment rather than keeping her money in savings and checking accounts.
But she is just one of the firm’s clients with similar stories. And hers is just one of many law firms who, on behalf of investors, are pursuing brokers, claiming they unsuitably recommended and sold Northstar’s fixed- and variable-rate annuity and investment products which proved to be unsafe and risky.
Northstar Financial Services (Bermuda) is now in liquidation proceedings after filing for bankruptcy.
The Bermuda Supreme Court last October appointed Rachelle Frisby and John Johnston of Deloitte Ltd. as the company’s joint provisional liquidators.
Founded in the 1990s, Northstar offered fixed- and variable-rate annuity and investment products.
In 2018, Global Bankers, which was owned by billionaire Greg Lindberg, acquired the firm. But Lindberg was indicted on bribery and wire fraud charges the following year.
Investors in Northstar Financial wanted their money and the company was unable to pay liquidation or redemption requests. The company was estimated to have incurred a deficit upwards of $260 million. By September 2020 they were reporting just $8 million in assets, and they filed for bankruptcy protection in 2020.
Last August, Lindberg was sentenced to seven years and three months in prison, to be followed by three years of probation, and was also ordered to pay a fine of $35,000.
He reported to the minimum-security facility, The Federal Prison Camp, Montgomery, to begin his sentence in October.