Tuesday, January 25, 2005
His years are numbered since a diagnosis of terminal cancer three years
ago, but clothing importer Ara Markarian, 58, cannot access most of his
savings at CIBC Wood Gundy.
The brokerage has blocked him from touching about $380,000 in his
investment account, claiming it covers a guarantee made on the trading
account of his business partner and cousin, Harry Markarian.
Ara Markarian said he had no knowledge of
the guarantee until he called the brokerage in February 2002, hoping to
take out $250,000 for a business opportunity that had come up.
The adviser who replaced his previous CIBC broker, Harry Migirdic, told
him she could still manage the portfolio for him, but couldn't withdraw
"For the years I have left, I can't do much with my money blocked. I was
counting on that money for my retirement," Ara Markarian testified
yesterday in Superior Court.
He was a witness in the lawsuit of his brother and sister-in- law,
retirees Haroutioun and Alice Markarian, two other former Migirdic
clients who are seeking from CIBC World Markets (parent company of CIBC
Wood Gundy) $1.4 million they claim was taken from them by the CIBC
under fraudulent guarantees, as well as $10 million in punitive damages.
Ara Markarian said he became a Migirdic client in the late 1980s, when
both were members of the Canadian Armenian Business Council.
His instructions to the broker, he said, were to put money in the
safest, most secure investments.
At first, Migirdic complied, but later he recommended more speculative
titles such as Intergold and Bre-X, Markarian said.
In the early 1990s, he recalled receiving a phone call one morning from
Migirdic who said his bosses wanted to update the files and needed him
to sign a guarantee covering the investment account of his wife, Janet.
When Migirdic arrived at his home that night with the form, Markarian
said, "I noticed there was no name of who I was guaranteeing,"
Markarian said he planned to write Janet's name in the blank space, but
Migirdic told him it had be typed in and he'd take care of it at the
office. Markarian signed, but said he asked Migirdic to send him a copy,
and was assured that would be done.
He never did get a copy, and forgot about it, Markarian said.
Asked why he signed, Markarian replied: "I had invested $500,000 with
him. ...To invest half a million, you have to believe it's in good
hands. It's a reputable firm, supposedly."
Evidence introduced at the trial indicated the name on the guarantee was
Harry Markarian, Ara Markarian's cousin and business partner.
But Ara Markarian said he always assumed the guarantee was for his wife
and never had cause to doubt it, since there was never a follow-up
communication from CIBC.
Even a phone call from his brother, Haroutioun, in the summer of 2001,
advising him to look closely at his CIBC statement, did not spark any
concerns. Though the actual name of the person he was guaranteeing did
not appear on the statement, there was an account number, and since it
was only one digit higher than his own eight- digit number, Ara
Markarian said he felt reassured it was indeed his wife.
He found out otherwise in 2002. On the copy of the guarantee document in
CIBC's files, the witness was someone he said he didn't know.
Surprised and "very mad," Markarian confronted his partner. But Harry
Markarian - also a Migirdic client - denied knowing about or asking for
"He was very upset by the situation," Ara Markarian said.
Throughout a partnership that dated from 1970, the two had always kept
their personal and business interests separate, Ara Markarian testified.
"I didn't know his investments; he didn't know mine. We never did
anything together in our private accounts."
When they called Migirdic, Markarian said the broker told them: " 'I'm
sorry. I regret what happened. I talked to my bosses. They know.' "
The trial resumes next week.