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Fox Guarding the Hen House


Broker broke promise, court told
Elderly widow held responsible for losses of two unrelated CIBC World Markets clients



January 20, 2005

Former CIBC World Markets broker Harry Migirdic assured the outraged son of one of his clients in 1998 that he'd rescind, within 48 hours, the guarantee which had her liable for the investment losses of another couple.


But three years later, the guarantee was still in place, and CIBC ended up exercising it to seize about $300,000 from elderly widow Kiganouchi (Ketty) Papazian to cover a deficit in the account of two other Migirdic clients, Bedros and Aida Papazian, to whom she was not related.

"It was the only money she had," said Richard Papazian, the son of Kiganouchi Papazian, who died in 2003 at age 78.

Richard Papazian, 44, was a witness yesterday in the multi- million-dollar lawsuit of two other former Migirdic clients, Haroutioun and Alice Markarian, against CIBC World Markets.

In his Superior Court testimony, Papazian said he looked after his mother's financial affairs after the death of his father in 1990. That meant dealing with her broker, Migirdic, and making sure her investments were safe.

He said he was furious when he first learned of the guarantee in 1998 after closely examining a document Migirdic had brought him to get his mother to sign.

It indicated she'd been guaranteeing the account of the unrelated Papazians since 1993.

"He (Migirdic) said a mistake was made, and he needed her signature to correct and reverse the mistake made in 1993," Papazian said.

He refused to bring the form to his mother to sign.

When Migirdic insisted it was just a formality, Papazian signed his mother's name to the document. "I didn't want a valid signature on it."

Papazian said he called Migirdic two days later, and "he said the guarantee was removed, everything's okay."

The next time Papazian saw the document, it was as a fax sent to him in April 2001 by CIBC branch manager Tom Noonan, along with a 1993 document signed by his mother.

Because she worked downtown in a clothing store that was in the same complex as the CIBC office, Migirdic often brought forms to the store for her to sign, Papazian said.

"She would not let me guarantee my own sister," Papazian said, "so I'm pretty sure she wouldn't guarantee someone she doesn't know."

But Noonan informed him the CIBC considered it a valid guarantee. Papazian said he called the brokerage because a stockbroker had told his brother-in-law at church a day earlier there might be problems with Migirdic accounts.

Migirdic, however, still insisted the guarantee was gone. The broker admitted Kiganouchi Papazian was on a list of problem accounts he'd provided to the CIBC, but Papazian said he assured him "it'd be taken care of like all the other times."

Not even a letter sent to CIBC president John Hunkin, to which was attached a letter signed by Migirdic admitting his misdeeds, was enough to block the seizure, Papazian said.

He recalled receiving a response from Hunkin a few days later that thanked him for his letter and misidentified his mother, calling her Winnie Hart.

Migirdic, terminated by the CIBC in April 2001, last summer was fined $305,000 and barred for life from the securities industry by the Investment Dealers Association of Canada.

During his testimony earlier this week, he admitted he had not paid any of that fine.

Nor has he paid a $500,000 court judgment obtained against him by CIBC after his dismissal.

Asked by the Markarians' lawyer, Serge Letourneau, if the CIBC had asked him to pay the judgment or seized any of his property, Migirdic said it hadn't.

He also hasn't paid in full the $250,000 demanded from him in the mid-1990s by CIBC after it found him guilty of discretionary trading and reimbursed that amount to one of his clients.

CIBC deducted a percentage from his commissions for a period of years after that - he wasn't sure how much in total - but it was less than $250,000, Migirdic said.

The deductions stopped when he'd gone a certain period of time without further problems, he said.

The trial continues today.


"CIBC must assume responsibility for the fraud.
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