May 28, 2005
To the end, CIBC Wood Gundy held fast to its contention that guarantees
a disgraced former broker had clients sign for strangers were legally
By signing confirmation documents without reading them, retiree
Haroutioun Markarian was negligent and contributed to his own
misfortune, CIBC lawyer Bernard Amyot said as a 42-day trial spread over
five months concluded in Superior Court. A written ruling from Judge
Jean-Pierre Senecal is expected within months.
Markarian and his wife, Alice, are suing CIBC for $1.4 million the
brokerage seized from them in 2001 when it exercised guarantees they had
unknowingly provided at the behest of their former CIBC broker, Harry
Migirdic, covering the trading losses of people they didn't know. The
Markarians also are seeking $10 million in punitive damages.
During his final arguments yesterday, Amyot insisted CIBC Wood Gundy
exercised the guarantees in good faith, based on documents it had in
The Markarians "weren't ruined" by the seizure and aren't indigent
today, Amyot said. "They didn't need that money to maintain the standard
of living they had."
Amyot defended CIBC's decision to pay $115,000 to Rita Luthi, a former
Migirdic client whose $356,000 trading deficit ended up being paid from
the Markarians' account. (Luthi testified she knew nothing about the
debt and was told by Migirdic her investments were doing well).
The Luthi payment was a business decision by CIBC to "buy peace," Amyot
Judge Senecal wondered why the brokerage hadn't gone after Luthi, the
principal debtor. Not only did it decide she didn't owe $356,000, it
sent her a cheque covering most of her losses when she complained.
"We had the right to go to the guarantor first," Amyot said.
He added that there's nothing preventing the Markarians from suing Luthi.
That prompted Serge Letourneau, lawyer for the Markarians, to remark
that the brokerage's position is to let Migridic's fraud victims fight
it out while it emerges unscathed.
Amyot denied the brokerage had been lax in supervising Migirdic. He'd
faced some disciplinary action and "wasn't a model employee," but Wood
Gundy "never had reason to doubt his honesty" until his confession in
2001, the lawyer said.