An investor who claims he lost $12 million under a Ponzi scheme is suing the Society of Notaries Public of British Columbia(SNPBC) over the alleged actions of former notary public Rashida Samji.
In February, the BC Securities Commission (BCSC) issued an investment alert, and announced that it was investigating Samji and Arvindbhai Patel with regards to their involvement in an investment scheme. In April, the BCSC announced a hearing for Samji, and alleged that she had committed a fraud and raised about $83 million from 218 investors in a scheme that invoked the name of B.C. winery the Mark Anthony Group Inc. According to the BCSC, the hearing is scheduled for early 2013.
The BCSC alleged that as part of the fraud, Samji told investors that her trust account was monitored by SNPBC.
In a new development, investor Andreas Manning, and his companies A.E. Manning M.D. Inc.and 0712199 B.C. Ltd., filed suit August 31 in BC Supreme Court against SNPBC. The plaintiffs are seeking damages, alleging that the society failed to regulate the conduct of Samji.
According to the statement of claim, Manning invested in the scheme on the strength of Samji's claims of being a notary under the supervision of SNPBC.
"Absent Samji's assurances that their investment was protected by her obligations as a notary and the supervision of the society," the claim alleges, "the plaintiffs would not have invested in Samji's 'Mark Anthony Investment.'"
The suit claims that the society is responsible for supervising the conduct of Samji as a notary, and as such owed the plaintiffs a duty of care.
"In breach of that duty of care, the society failed to supervise, adequately or at all, the conduct of Samji and as a result, failed to put a stop to her Ponzi scheme," the statement of claim contends.
The suit alleges that SNPBC was negligent in:
•failing to inspect, adequately or at all, Samji's practice as a notary;
•failing to audit, adquately or at all, Samji's trust transactions; and
•allowing Samji to practise as a "roving notary" without a trust account.
In a statement, the SNPBC told Business in Vancouver that it could not comment on the specifics of the case but said it is supporting the ongoing investigations of the BCSC, the RCMP and other authorities. It added that, upon hearing of investment scheme from the BCSC, it "immediately" suspended Samji's membership and ability to practise as a notary public.
The SNPBC said it has a mandate to protect the public and ensure that notaries meet professional requirements and ensure that members provide "the highest standard of notary services while maintaining their professional responsibility to the public in their role as notaries."
However, SNPBC cautioned: "It is important to note that with the exception of some individuals who have been specifically trained and licensed to do so by the proper regulatory authorities, members of the Society of Notaries Public are not authorized to practise as investment managers or advisors."
