May 25, 2005
If CIBC Wood Gundy had been diligent in supervising Harry Migirdic, a
stockbroker with a history of rule infractions, it would have detected
anomalies in his clients' accounts well before he admitted to them just
prior to being terminated in April 2001, a lawyer for two ex-clients said
Serge Letourneau was making his final arguments in Superior Court on
behalf of Haroutioun Markarian, 71, and his wife, Alice, 67, a retired
couple suing the CIBC for $10 million in punitive damages and the return
of $1.4 million seized from them in 2001 under guarantees Migirdic had
them sign covering the accounts of people they didn't know.
Letourneau said that, between 1980 and 2001, Migirdic had been threatened
with being fired at least four times by superiors at Wood Gundy and
Merrill Lynch Canada (which merged with Wood Gundy). It's unusual in
business to give anyone that many warnings, he said.
The CIBC "should have rid itself of Mr. Migirdic's services well before it
did," Letourneau said. "It willingly blinded itself in its supervisory
When Migirdic's misdeeds eventually came to light, the brokerage tried to
shift the entire responsibility to the Markarians, whose only real mistake
was to trust their CIBC broker, Letourneau said.
"If Mr. Markarian had the misfortune of being duped by Mr. Migirdic, he's
not alone," the lawyer noted, rattling off a list of names that included
CIBC Wood Gundy's branch manager, Tom Noonan, and several members of the
CIBC compliance department who failed to follow up on questions raised
about Mirgirdic's accounts and trades over the years.
Letourneau said the Markarians were never actually contacted by any CIBC
official other than Migirdic before his firing, though their risk profile
(updated periodically by Migirdic) gradually evolved from low-risk to
speculative, the exact opposite of what's appropriate for people their
Their investment priority had been preserving their capital, yet it ended
up being taken from them, "which is nonsensical," Letourneau said.
He noted that the CIBC also never informed Migirdic's clients of his
"chronic" rule breaches and fines and never even stripped him of the
vice-president title that supposedly required a good compliance record.
The fact he was one of the top producers in the Montreal branch,
generating $11.5 million in commissions between 1990 and 2001, might
explain why he kept the title, Letourneau said.
Closing arguments in the case, now in its fifth month, continue today.