Top Durban law firm insists it had nothing to do with multi-million rand Ponzi scheme after damning high court judgment
Durban - One of Durban’s most prestigious and oldest law firms; Garlicke & Bousfield is still haunted by a Ponzi scheme - run by one of its and trusted lawyers, Colin Cowan - and insists it had nothing to do with it.
It has been 10 years since Cowan, who was 71 years old at the time, committed suicide after writing a confession to fraud.
The law firm lost its bid to convince the Pietermaritzburg High Court that it had nothing to do with the Ponzi scheme that robbed many investors of millions.
On Tuesday, Judge Jerome Mnguni ordered Garlicke & Bousfield to pay R7m to Merlin Stols a businessman and a former client who had invested millions in what turned out to be a Ponzi scheme run by Cowan.
Stols is one of the complainants in several matters that are pending before court.
In a statement shortly after the high court ruling, the directors of Garlicke & Bousfield said they were deeply disappointed at the judgement and were in the process of considering whether to appealing the decision.
Cowan committed suicide at his home on Innes Road in Durban by firing a bullet to his head in November 2010 and had left a suicide note addressed to the firm.
In the letter, Cowan admitted to committing fraud and that his actions compromised the firm.
“I committed fraud and compromised the firm. I am sorry that I breached the trust placed in me,” he said in the letter.
But his confession did not earn him forgiveness from the people who had invested their millions; instead they took the law firm to court on bases that Cowan operated his dealings from the offices of the law firm and that the letters they had received had the letter head of the law firm.
The law firm said it remains steadfast in its position and disagrees with key legal issues outlined in the judgement.
“We deny any knowledge of the illegal Ponzi scheme operated by the late Colin Cowan. We would like to reiterate the fact that a forensic report conducted into this matter found no evidence that the directors at Garlicke & Bousfield were aware of Cowan’s scheme or complicit in the scheme in any way,” the statement said.
They said while the directors and staff of Garlicke & Bousfield respectfully acknowledge the finding of the High Court, they were optimistic that another court may come to a different decision.
The firm said it remained committed to serving its clients and the profession to the highest standard, and all associated with this company were proud of its 150-year heritage as one of the country’s most respected legal firms supported by a team of experienced and highly regarded legal professionals.
“Therefore, we would like to reassure all of our clients that this case pertains to issues that are at least a decade old and that, going forward, we will continue to be committed to providing outstanding legal services and maintaining our credibility as leaders in our field,” said the directors of Garlicke & Bousfield in the statement