Lawsuit also makes claims against Grant Thornton
A man from Vancouver Island, who started out as a day trader, says that he lost a $415 million fortune generated through investing because his financial advisors were negligent.
In a lawsuit filed with the BC Supreme Court, carpenter Christopher DeVocht alleges that RBC Dominion Securities, RBC Wealth Management, and accounting firm Grant Thornton did not ensure that the advice he was given was appropriate to his level of financial planning and investing sophistication.
The allegations have not been proven in court and the lawsuit does not provide proof of the figures included in the claim. None of the firms named in the allegations has publicly acknowledged receipt of the lawsuit.
DeVocht says that he generated his investment fortune with a portfolio heavily weighted towards Tesla stock and worth $88,000 at the end of 2019.
"As the value of Tesla stock grew rapidly during that period, Mr. DeVocht continued investing all of his money and the investment gains in put and call options for Tesla stock," says the claim, reported by CBC News.
When further gains boosted his portfolio to $50 million, DeVocht says he entered into an agreement for financial advice with RBC and was also introduced to tax advisors at Grant Thornton, but he claims that advisors did not adequately understand his financial goals which included liquidating his Tesla options in favour of secure investments to provide a passive income for him to retire early (he is in his early thirties).
Bloomberg reports that the court filing alleges that DeVocht was advised to form a corporation as an investment holding company which was provided with an account allowing it to easily borrow money to invest and that his portfolio reached $415 million.
However, when Tesla stock dropped in 2022 he borrowed $20 million from his corporation to trade in his personal account but both he and his corporation were forced to sell Tesla shares to repay their respective loans and eventually their securities were essentially worthless.
