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after exercising the options was she obligated to return any of
that stock to CTI. During 2002 and thereafter, petitioner did
not sell any of the purchased shares. Those shares were in
electronic form.
D. Petitioners’ Agreement With CIBC Oppenheimer
Petitioners entered into a “Client Agreement” and an
“Investment Management Agreement” with their stockbroker, CIBC
Oppenheimer. The client agreement stated:
I agree to pay on demand any balance owing with
respect to any of my accounts, including interest and
commissions and any costs of collection (including
attorneys fees, if incurred by you). I understand that
you may demand full payment of the balance due in my
accounts plus any interest charges accrued thereon, at
your sole option, at any time without cause and whether
or not such demand is made for your protection. In
addition, Margin Loans are not made for any specific
term or duration but rather are due and payable at your
discretion upon demand * * *
The investment management agreement stated that “Client
represents that Client is the beneficial owner of any securities
Client may deliver to the Custodian and that there are no
restrictions on the transfer, sale and/or public distribution
thereof.” The investment management agreement also stated that
“Client understands and agrees that all transactions shall be for
Client’s account and risk and that neither CIBC WM [CIBC World
Markets Corp., the program manager of the assets of petitioners’
account at CIBC Oppenheimer] nor any Portfolio Manager is
guaranteeing, or otherwise making representations with respect
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