Tuesday, April 26, 2005
A former compliance officer for brokerage firm CIBC Wood Gundy testified
in Superior Court yesterday that his initial reaction after looking into
the case of a retired Montreal couple allegedly victimized by CIBC
broker and vice-president Harry Migirdic was "we will probably have to
eat this one."
Daniel Bowering, who worked in Wood
Gundy's compliance department from 2000 to 2002, was assigned to gather
information relating to the claims of Migirdic clients Haroutioun and
Alice Markarian, whose account was guaranteeing a trading account in the
name of Migirdic's uncle in Turkey, Sebuh Gazarosyan, someone they'd
never met. That account was about $1 million in debt
Early in 2001, Migirdic confessed to his CIBC superiors that the
Markarians had no knowledge of that guarantee or another on a second
account. He obtained their signatures by misrepresenting documents he
had them sign.
CIBC dismissed him shortly after but nonetheless exercised the
guarantees, seizing about $1.4 million from the Markarians' accounts.
They're suing CIBC World Markets (parent company of Wood Gundy) for
return of the money, plus $10 million in punitive damages.
The Superior Court trial, which began in January, resumed yesterday with
Bowering on the witness stand.
As compliance officer, he said it was his job to supervise branches,
managers and brokers, review trades and handle customer complaints..
But under questioning from Judge Jean-Pierre Senecal, he admitted he
never actually spoke to Migirdic or the Markarians in the course of his
investigation. Since others at the brokerage already had done so, he
didn't feel it necessary.
"It's not standard in the industry to go to the clients themselves," he
Bowering's investigation did include looking at trading records and
documents on file. In the Markarian case, these included signed
confirmations of the guarantee going back six years.
He said he didn't have that information in hand when he made an early
notation CIBC might have to "write off" the $1 million in losses in the
Gazarosyan account because of Migirdic's admissions.