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The Gazette (Montreal)
January 25, 2005 Tuesday
Final Edition
'I was counting on that': Witness shocked his account was blocked
by PAUL DELEAN, The Gazette
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 the money.
"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 any guarantee.
"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.
January 25, 2005 Tuesday
Final Edition
'I was counting on that': Witness shocked his account was blocked
by PAUL DELEAN, The Gazette
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 the money.
"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 any guarantee.
"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.