Law firm payout to Ponzi scheme victim is a bitter pill
Judge lashes ‘biased’ directors, saying one of them was a ‘stranger to the truth’ over multimillion-rand fraud
Businessman Merlin Stols has succeeded in holding law firm Garlicke and Bousfield accountable for R7m he lost when he invested in what he thought was a bridging finance scheme, run by executive consultant Colin Cowan who committed suicide, admitting fraud.
The firm, and its directors, wanted the court to believe that they did not know that Cowan, “a highly respected attorney”, was running a Ponzi scheme under their noses.
But in a scathing judgment, directing that the firm must pay Stols, Pietermaritzburg High Court judge Jerome Mnguni singled out some directors as being biased and less than truthful about their knowledge of the matter...