Older Couple’s Broker Overconcentrated More Than $2.2M of Their Funds in Now Defunct Investment
An older retired couple from South America is pursuing a Financial Industry Regulatory Authority (FINRA) arbitration claim against Raymond James & Associates, Inc. after they suffered a seven-figure loss in Northstar Financial Services (Bermuda). Now, the senior investors are seeking up to $5M in damages, along with interest and costs.
Our Northstar (Bermuda) arbitration attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) are representing these South American nationals in their FINRA arbitration claim that they filed against this US-based broker-dealer. A panel of arbitrators will hear this investor case in Boca Raton, Florida.
Retirees Sought Safe Haven For Their Assets, Instead Suffered Huge Losses
This is a tragic case in which these retirees should never have sustained such massive losses were it not for the unsuitable and utterly inappropriate conduct of Raymond James Financial and its agents. The couple had looked to the US as a safe haven for their funds, including their savings, and were initially with Morgan Keegan Bank. However, following a merger, the couple became clients of Raymond James. The financial advisor in question, based out of Miami, continued to make unsuitable recommendations involving Northstar.
The brokerage firm initially recommended that the claimants concentrate more than $1M of their funds in Northstar Financial Services (Bermuda). The couple would go on to follow further recommendations by their financial advisor that would cause them to end up investing over $2.2M in this off-shore product even when there were more known, stable, comparable US-based investments available. All of this, despite the fact that the investors made it clear from the start that they were averse to risk.
Meanwhile, their Raymond James broker told them that their Northstar investment was “guaranteed,” and the claimants, both unsophisticated investors, trusted their financial advisor’s assertions while having no idea that these offshore insurance products lacked US-based insurance protections and were very high risk. Not only that, but Northstar Financial Services (Bermuda) has since gone into bankruptcy and liquidation proceedings and is no longer solvent. Its owner, Greg Lindberg, is in prison and likely funneled the off-shore entity’s money into other companies he operated.
Unsuitable Recommendations, Misrepresentations & Omissions
Two years ago, when the claimants asked that their Raymond James financial advisor remove them from Northstar Financial Services (Bermuda), the advisor misrepresented the exit fees involved, falsely inflating the amount needed to get out or end the contract.
Considering that the surrender fee would have been much less, the advisor’s actions constituted a gross misrepresentation. By the time the retirees tried to exit the investment again, it became impossible because a Bermuda court had frozen the assets in the wake of Northstar Financial Services (Bermuda)’s financial woes.
In this Northstar Financial Services (Bermuda) arbitration claim, the investors are alleging:
- Misrepresentations and omission
- Unsuitable recommendations
- Concentrations
- Breach of fiduciary duty
- Negligence
- Fraudulent conduct
- Breach of contract
- Unjust enrichment
- Failure to supervise its financial advisors and customers’ account
No reasonable supervisor would have approved the recommendation that these older investors get involved in Northstar Financial Services (Bermuda). Also, under Florida law, we believe that Raymond James committed abuse, neglect, and exploitation of elderly persons and disabled adults through their financial negligence.
Unfortunately, the broker-dealer, like the other firms that sold these investment products to customers, sought to avail of the high commissions and remunerations rather than making sure that their recommendation of this entity’s products was suitable and safe for customers. This is not the first FINRA arbitration claim that SSEK Law Firm has brought against Raymond James Financial or other brokerage firms over Northstar (Bermuda) investor losses.
Skilled Northstar Financial Services (Bermuda) Investment Lawyers
If you suffered losses in Northstar (Bermuda) products such as Global VIP Elite, Global Advantage Plus Series, Global Index Product, Global Advantage Select, or Global Interest Accumulator call SSEK Law Firm at (800) 259-9010 today. Internationally via WhatsApp (text only), reach us at (713) 227-2400. We represent investors in the United States and abroad.