June 19, 2006
Canadian investors everywhere should thank Haroutioun and Alice
Markarian. When the CIBC World Markets brokerage seized $1.4 million
from the Montreal couple's investment accounts - to cover trading losses
of people who were complete strangers to them - the Markarians fought
And last week they were vindicated. Superior Court Judge Jean- Pierre
Senecal ordered CIBC World Markets to pay the Markarians more than $3
million, including an unprecedented $1.5 million in punitive damages.
The CIBC deserved every word of criticism Senecal heaped on it, just as
it deserved to be hit with historically high punitive damages. The
brokerage's behaviour was both reprehensible and irresponsible.
As The Gazette's Paul Delean reported, it wilfully overlooked warning
signs that one of its vice-presidents, Harry Migirdic, was acting
improperly. He had a history of regulatory breaches and for that reason
should have been the subject of close scrutiny, Senecal said. But
Migirdic notably was not.
In the same year, 2001, that the brokerage wrongfully stripped the
Markarians of their money, the CIBC made a profit of $1.6 billion. In
that context, the greed and arrogance of CIBC World Markets seems
nothing short of stunning. Even though Migirdic admitted to the
brokerage that the Markarians had no idea they had signed papers
guaranteeing other people's trading accounts, the CIBC went ahead and
liquidated the retired couple's accounts to cover debts they had not
The Markarians' lawyer, Serge Letourneau, correctly described the
judgment a milestone for Canadian investors: "This helps restore the
balance between small investors and financial institutions that try to
abuse their positions of dominance."
As happy as Haroutioun Markarian was that the Canadian justice system
protected him, he left no doubt as to what the moral of the story was in
"I'm very vigilant now. I don't trust anyone. Financial institutions are
out for themselves. That's why investors have to watch their accounts