Montreal Gazette, Canada
May 22 2004
Widow ‘didn’t trust banks’
Savings loss a painful end for mom: son. As bitter lawsuit crawls
through court, disciplinary panel considers penalties
Saturday, May 22, 2004
Ketty Papazian was a 76-year-old widow when she put her north-end
Montreal home up for sale in April 2002 after her savings were
drained by what she believed was misconduct by her broker. She died
in November. Her estate is now seeking millions in damages for what
one lawyer calls “fraudulent manoeuvres” of former broker Harutyun
Migirdicoglu at CIBC Wood Gundy’s downtown office.
CREDIT: PHIL CARPENTER, THE GAZETTE
Two years ago, after her investment account had been emptied by CIBC
World Markets Inc. to pay for somebody else’s trading losses,
76-year-old widow Kiganouchi (Ketty) Papazian put her house in
north-end Montreal on the market.
Then she had an abrupt change of heart.
“She got a very good offer for the house,” son Richard recalled, “but
then she thought, ‘If I sell it, where do I put the money?’ She
didn’t trust banks any more.”
Papazian didn’t sell. It remained her home until last November, when
she died of cancer at age 78.
It was a painful end to a life complicated in its final years by a
bitter, drawn-out and still-unresolved lawsuit with CIBC World
Markets over what happened to her savings.
Ketty Papazian – and now her estate – wanted reimbursement of the
$299,275 that CIBC withdrew from her account.
The estate is seeking $10 million in punitive damages, $400,000 for
portfolio mismanagement, restitution for losses suffered from
liquidation of her investments and payment of legal costs for what
her lawyer called the “fraudulent manoeuvres” of a former broker at
CIBC Wood Gundy’s downtown office.
The lawsuit, filed two years ago, alleges CIBC was professionally
negligent in failing to adequately supervise and control the trading
practices of broker Harutyun Migirdicoglu (also known as Harry
Migirdic), and abusive in making her liable for huge trading losses
run up by people she didn’t know.
There is still no trial date set in Quebec Superior Court.
But a lawyer for the Investment Dealers Association of Canada said
yesterday Migirdicoglu should be barred for life for a long list of
After an IDA disciplinary hearing in March, the securities industry’s
self-regulatory body found him guilty of multiple counts of trading
without the knowledge or authorization of a client, obtaining account
guarantees under pretense, altering investment objectives and risk
tolerance on Know-Your-Client forms without consent, knowingly
accepting a forged power of attorney and offering a client a $400,000
promissory note to compensate for trading losses without the
knowledge of CIBC.
Migirdicoglu didn’t deny the allegations, but did not plead guilty.
At his hearing yesterday to receive submissions on a suitable IDA
penalty, lawyer Caroline Champagne said the severity of the former
broker’s breaches of the rules warrants a lifetime ban from the
securities industry. She also recommended $370,000 in fines and
another $80,000 to cover investigation costs. An IDA panel is
expected to make its decision by mid-June.
In connection to other civil actions against Migirdicoglu and CIBC,
the IDA said some have settled out of court with CIBC. But lawsuits
seeking $5 million for losses and $55 million in punitive damages
still are making their way through the legal system. The first is due
to come to trial in January.
For Richard Papazian, the death of his mother only strengthened his
resolve to see the matter dealt with by the courts. Of Armenian
descent, she was born in Greece and lived in Argentina prior to
moving to Canada in 1964 with her late husband, Dicran.
When his mother began cancer treatments, he informed CIBC by letter
late in 2002. The bank didn’t budge.
“When she was in hospital, I had to leave her side twice (for
deliberations with CIBC’s lawyers) and felt horrible about it. But
she told me, ‘You have to take care of this. You have to make it
right,’ ” Papazian said.
“We tried every possible way to get back her money without a
$10-million lawsuit, but got nowhere. I want to make sure no bank or
financial institution acts in this way again.”
His mother, whose principal language was Armenian, did not read or
understand English well, Papazian said. She had entrusted about
$400,000 to Migirdicoglu after her husband died in 1990. Migirdicoglu
had looked after her husband’s affairs.
In the lawsuit, it’s alleged Migirdicoglu had her sign a document in
1993 that unknowingly made her responsible for any deficit in the
trading accounts of two other parties – Bedros S.F. Papazian and Aida
Papazian – who were not only unrelated to her, but complete
CIBC’s position, as outlined in Superior Court filings by its law
firm Heenan Blaikie, is that Papazian was fully aware of the
guarantee and that she and her son were “complicit in their own
It claims it acted in good faith, never failed to properly supervise
its financial consultants and is not legally responsible for the
actions of the broker and any losses suffered by his former clients.
From: Emil Lazarian | Ararat NewsPress