Investors Scrutinizing the Regulators

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Fox Guarding the Hen House


Fired broker unrepentant
Insists he was trying to help his clients



Saturday, May 22, 2004


Disgraced investment manager Harutyun Migirdicoglu, who a lawyer for the Investment Dealers Association of Canada said yesterday should be barred for life for a long list of misdeeds, was a big wheel in Montreal's Armenian community, from which he drew many of his clients.

"To me, he was like God. He lived in a big house, drove a Mercedes. I was proud to see an Armenian fellow so successful in English society," said Richard Papazian, 43, whose late mother was one of his clients - and he alleges in his suit, one of Migirdicoglu's victims.

The former CIBC World Markets vice-president, more commonly known as Harry Migirdic, was a registered investment representative in Quebec for more than two decades. In 1986, he was made a vice- president at Merrill Lynch, and in 1990 transferred to the downtown branch of Wood Gundy - now CIBC.

At both firms, he was the subject of several warnings and disciplinary measures, including a $30,000 fine at CIBC for knowingly accepting a power-of-attorney he knew had not been signed by the owner of an account, according to evidence presented yesterday to a three-member disciplinary panel of the IDA.

Terminated by CIBC in April 2001, Migirdic has not worked since for any firm belonging to the Investment Dealers' Association.

And he won't again, if the recommendation of lawyer Caroline Champagne to the panel is accepted.

The panel is expected to make its decision in a couple of weeks.

Migirdic, who swung his briefcase at a Gazette photographer as he entered the IDA offices yesterday, did not comment on Champagne's proposal. But he did say he meant no harm to clients. The abrupt fall of Wall St. and stocks like Nortel triggered what happened, he said.

The infractions were committed "to cover another account," he told the panel. "There was no intent to harm any one client, only to help another client who was in trouble. I couldn't help any of my clients at the end. Everybody suffered."

The IDA listed 24 rule transgressions during Migirdic's time as a CIBC representative. At a disciplinary hearing in March, Migirdic didn't deny the allegations, but did not plead guilty. He said all transactions were done with the clients' consent, since they'd given him the mandate to make their money grow. Only when markets went bad did they complain about his management, he said.

The IDA, however, found him guilty on all counts.

Its preliminary report said more than 20 clients, many of them elderly, had complained to CIBC about his conduct

In one case, Migirdic had a trading account for a holding company guaranteeing a trading account opened in the name of his 73-year- old uncle in Turkey. The guarantee eventually led to the extraction of more than $691,000 from the company account, cleaning out the owners.

In another case, Migirdic made about 1,400 trades over a seven- year period in the account of an investor who had listed his risk tolerance as low. The portfolio shrank by more than 50 per cent between December 1999 and June 2000, dropping to $471,519 from $1 million.

In yet another case, Migirdic had two longtime clients sign a document "under the false pretense that it was required for account maintenance," the IDA said.

The signatures actually guaranteed the account of someone unrelated whose trading losses they ended up covering to the tune of $356,824.


"CIBC must assume responsibility for the fraud.
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