January 11, 2005
Retired machine-shop owner Haroutioun
Markarian finally got to see the stranger whose investment account he
unwittingly guaranteed to the tune of $356,824 in 2001.
Rita Luthi, a resident of the northern Quebec community of Senneterre,
was the first witness in Superior Court yesterday in the
multimillion-dollar court action pitting Markarian and his wife, Alice,
against CIBC World Markets, former employer of their former broker,
In the first of a few such lawsuits to get to trial, they're seeking
from the CIBC $10 million in punitive damages, $1.4 million taken from
their accounts under "fraudulent" guarantees, $226,935 in transaction
losses, plus legal costs, after losing a large part of their savings in
a scenario they claim was orchestrated by Migirdic.
In his opening statement yesterday, their lawyer, Serge Letourneau, said
company officials knew of Migirdic's 20-year record of "chronic
delinquency," and failed in their duty to safeguard clients.
"They kept him employed for one reason - he was one of its most
performing producers, generating more than $1 million in commissions,"
CIBC World Markets' lawyer Bernard Amyot, while admitting he had no
evidence of a motive for the Markarians' guarantee of Luthi's account,
argued in his opening statement that the guarantees were legitimate and
signed by the plaintiffs, and the company was within its rights in
While the couple's experience was "regrettable," Markarian is a prudent
businessperson who "understands the consequences of a signature," Amyot
If people can avoid contractual commitments because they claim they
didn't read or understand what they signed, the implications for the
economic and judicial system are profound, Amyot maintained.
Luthi, 51, who runs a small meat shop with her husband, also is a former
client of CIBC World Markets and Migirdic, who was assigned as her
investment representative in the early '90s when her first broker left.
She testified yesterday she had no idea her account was being guaranteed
by the Markarians, people she didn't know.
Luthi said she didn't even know she was losing money in her trading
account. She had indicated to Migirdic she did not want risky
Capital preservation "was primordial for me," Luthi said.
"I had no reason to believe he lied to me," she said. "He reassured me.
Because of his position (company vice-president), I was not suspicious."
In her weekly conversations with Migirdic, he indicated her account was
worth something in the range of $145,000 to $165,000, she said.
"According to him, everything was going well."
Only when she spoke to someone else at the CIBC, after Migirdic went on
sick leave in 2001, did she learn otherwise. "They said I should call
Toronto," Luthi said. The call confirmed the account was empty, and she
owed an additional $356,824.
The person she spoke with asked if she knew the Markarians. Luthi said
"I never asked for a loan (guarantee)," Luthi said. "I didn't know what
was going on."
A lawyer she consulted is the one who explained the Markarians had been
guaranteeing her account, she said.
The case resumes today.