- October 26, 2021
- Wells Fargo Advisors
Raul Benitez (CRD#: 4457185) is a dually registered Broker and Investment Advisor at Wells Fargo Clearing Services, LLC in Aventura, FL. He entered the securities industry in 2001 and previously worked for Suntrust Advisory Services, Inc.; Suntrust Investment Services, Inc.; LPL Financial, LLC; J. P. Morgan Securities, LLC; Chase Investment Services Corp.; Brokers International Financial Services, LLC; Kovack Securities, Inc.; Mutual Service Corporation; American Express Financial Advisors, Inc.; IDS Life Insurance Company; and American Express Financial Advisors, Inc.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in July 2021, a customer dispute was filed against Raul Benitez. The allegation states, “Client alleges Northstar investment was unsuitable.” Damages of $218,708 are requested. The product at issue in this case is Northstar Financial Services (Bermuda), Ltd.
In addition, Raul Benitez has been the subject of three customer complaints, including one that remains pending, including the following:
- December 2020–”Claimant alleges that in Summer 2019 his FA made an unsuitable recommendation and misrepresentations in connection with an investment strategy that involved using a portfolio of securities as collateral for a loan.” The customer dispute is pending.
- February 2019–”Customer alleged that the recommendation for a managed/fee based account was not suitable.” The customer dispute was settled for $8,486.24.
- March 2013–”WHILE OPENING ACCOUNT FOR BANK AFFILIATE, REGISTERED REP FAILED TO RECORD IN AFFILIATE BANKS SYSTEMS THE ACCOUNT OWNERS DUAL CITIZENSHIP OR THE FACT THAT THE FUNDS TO BE DEPOSITED IN THE ACCOUNT ORIGINATED FROM OUTSIDE THE U.S. REGISTERED REP ALSO FAILED TO SUBMIT LETTER FROM ACCOUNT OWNER INSTRUCTING LIQUIDATION OF TRUST ACCOUNT FOR PRINCIPAL REVIEW AND APPROVAL.” Raul Benitez was discharged from JPMChase Bank.
- February 2011–”CLIENT ALLEGES SIGNATURE ON ACCOUNT OPENING DOCUMENTS IS NOT AUTHENTIC. ACTIVITY DATES ARE 08/11/2010-08/11/2010. FINAL DETERMINATION COMPLAINT WAS DENIED.” The customer dispute was denied.
For a copy of Raul Benitez’s FINRA BrokerCheck, click here.
As has been previously reported by the Wolper Law Firm, recent developments in the bankruptcy filing of Northstar Financial Services (Bermuda) Ltd. have made it increasingly likely that the company won’t be restructured and may be liquidated. While that’s not good news for investors seeking to recover their principal, it does illuminate a path forward toward the possible recovery of assets.
Northstar: Background and Products Offered
Northstar Financial Services (Bermuda) Ltd. operated out of the country of Bermuda, although its investment products were also available in other countries through broker-dealers in the U.S. and elsewhere. The company was acquired by Greg Lindberg’s Global Bankers Insurance Group several years ago.
Among the investment products it offered were variable- and fixed-rate annuities. Product names included Global VIP Elite, Global Advantage Plus Series, Global Index Product, Global Advantage Select, and Global Interest Accumulator. These products were allegedly marketed to investors as low-risk investments that could offer tax benefits in excess of those typically available in the U.S., making them especially attractive to American investors. According to some investors, these products were likened to money market account equivalents, which are generally considered to be relatively conservative investments with high liquidity.
The insurance products developed by Northstar Financial Services (Bermuda) Ltd. were sold by multiple broker-dealer firms. Bankoh Investment Services, Truist Investment Services, Ocean Financial Services, JP Morgan Securities, and SunTrust Investment Services offered them to their clients. They were most commonly sold in the Southeastern U.S., although other investors may be impacted, too.
Insolvency and Liquidation
Northstar Financial Services (Bermuda) Ltd. filed for bankruptcy in Bermuda in 2020. A Bermudan court denied the company’s request for an extension to complete restructuring in March 2021, making liquidation of the company likely. While monthly payments to investors have already stopped, investors are now unlikely to get their principal back from the company as a result of this development. These investments are illiquid and cannot be surrendered, so not only do investors lose future potential gains but they’ve lost everything they’ve put into these products so far.
For insight into how Northstar Financial Services (Bermuda) Ltd. might have collapsed, it takes only a short lookback. The company is owned by Greg Lindberg’s Global Bankers Insurance Group.
Greg Lindberg, the owner of a large company named Global Growth, was sentenced to seven years and three months in federal prison after his conviction on public corruption and bribery charges. Beginning in 2017, he worked to bribe an elected North Carolina insurance commissioner through contributions to the official’s political campaign. Lindberg, in collaboration with co-conspirators, intended to ensure favorable actions from the insurance commissioner toward one of the companies he owned, Global Bankers Insurance Group, through his financial influence.
Lindberg’s Global Growth (formerly Eli Global LLC) operates subsidiaries in the insurance, healthcare, finance, commercial, education, research, and media sectors. As early as 2019, liquidity concerns were raised about Global Growth’s affiliated insurance companies, including allegations that these companies’ assets were being improperly diverted to other entities under Lindberg’s control.
What Investors Can Do Right Now
Despite the bleak outlook in recovering principal from Northstar Financial Solutions (Bermuda) Ltd. directly, investors may still have a path to recovery of assets. Working with investment loss attorneys who specialize in these cases, investors can bring their claims against the brokerage firms that recommended the securities.
Broker-dealer firms are obligated under Financial Industry Regulatory Authority (FINRA) regulations to carry out due diligence on any investment products they offer their clients. Financial advisors also have a fiduciary duty to their clients; as part of this, only suitable recommendations may be made.
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
The investment products developed by Northstar Financial Solutions (Bermuda) Ltd carried a greater risk than suggested, making them inappropriate for broker-dealer firms to offer to some investors; in fact, it’s alleged that the company website included a disclaimer that some investments may not meet U.S. securities regulations. In addition, it could be argued that Northstar Financial Solutions (Bermuda) Ltd.’s relationship with Lindberg should have raised red flags through broker-dealers’ due diligence practices. This could leave broker-dealers open to potential liability when it comes to covering investors’ losses with Northstar Financial Solutions (Bermuda) Ltd. investment products via class action through FINRA arbitration.
The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies, and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at (866) 814-6247 or by email at email@example.com.