Haroutioun and Alice Markarian, who had
$1.4 million seized by the CIBC in 2001 to honour guarantees Migirdic
deceived them into signing for people they didn't even know, were
awarded an unprecedented $1.5 million in punitive damages by Judge
Senecal, who presided over the Superior Court trial in 2005.
He said the brokerage appropriated the money illegally, treated the
Markarians in an arrogant and "degrading" manner and "cruelly failed" to
control and supervise its employee.
"CIBC must assume responsibility for the fraud of which (the Markarians)
were victims," Judge Senecal said. "It was responsible not only
indirectly, but directly."
He further chided the brokerage for bestowing on Migirdic the title
vice-president based on sales, creating "a false sense of confidence"
that clients were dealing with senior executives, and for dragging out
the legal proceedings in an attempt to "exhaust" the plaintiffs or cause
them to settle for less than their due.
"The evidence shows the defendant's attitude toward the Markarians was
not an isolated gesture, but extended to other victims," Judge Senecal
must assume responsibility for the fraud.”
JUDGE JEAN-PIERRE SENÉCAL
Since that ruling, court records show notices of out-of-court
settlements in the cases of Kiganouchi Papazian and Ara Markarian, who
also said they'd unknowingly signed guarantees covering the trading
losses of other Migirdic clients.
Papazian, a widow who died in 2003 at the age of 78, had sought the
return of $299,275 taken from her accounts in 2001 when the CIBC
exercised the guarantees. Ara Markarian had $581,603 seized.
The CIBC also settled with Peter Arslanian, 76, who in his statement of
claim blamed $1.2 million in investment losses on "faulty management and
incompetence" by the brokerage and Migirdic (who was fired in 2001).
Arslanian said his portfolio shrank by $1 million in a year. Migirdic
told him he'd mortgage his house to repay him, but was fired first,
The CIBC, which denied any responsibility for the losses, liquidated a
further $111,158 in Aslanian's account to cover a balance it said he
owed on a line of credit.
Judge Senecal noted the brokerage's compliance department somehow failed
to detect 1,400 unauthorized trades in Aslanian's account.
The CIBC also has settled with Girair Chadakhtzian, whose RRSP was
gradually converted from mutual funds into a high-risk portfolio that,
by 2001, had almost a 90-per-cent weighting in a single stock, Intergold
Ltd., which Migirdic promoted and manipulated. Chadakhtzian was claiming
$320,307 for losses in his RRSP and $5 million in punitive damages.
Also settled are the claims of Kiganouchi Papazian's son Richard, who
was seeking $166,266 for trading losses in his RRSP; four members of the
Toukhmanian family, whose investment account dropped $386,230 under
Migirdic's management; and Levon Afeyan and Ana Papazian, who lost
$148,000 in their RRSPs because of unsolicited, speculative stock
CIBC spokesman Rob McLeod confirmed the settlements but would not
"The matter is closed," McLeod said.
He would not say if the CIBC had yet received, or intended to go after,
the $550,870 settlement it won against Migirdic in Superior Court in
2003 over monies he owed at the time of his termination.
During the Markarian trial, Migirdic testified he had not paid the money
and the CIBC had not insisted on it or seized any of his property.
The family home in Cartierville, which has a municipal evaluation of
$864,000, was transferred by Migirdic to his wife, Vartiter
Doghramadjian, in 1998 for "no consideration," according to documents on
file at the land-registration office.
SIDAWAY THE GAZETTE
Migirdic, the former broker at the heart of the CIBC trading
scandal, transferred Cartierville home to his wife, Vartiter
Doghramadjian, in 1998 for “no consideration.”
Brokerage failed to
detect 1,400 unauthorized trades
Judge Senecal noted that Migirdic
generated (and split with the brokerage) commissions that averaged more
than $1 million a year from 1991 to 2000.
In its action against Migirdic, the CIBC claimed he had "caused and
continues to cause considerable damages to plaintiff as a result of his
wrongful and illegal behaviour toward plaintiff and its clients." At the
time, it evaluated those damages at $100,000.
In retrospect, that number seems a bit low.