Investor Sues After Losing $415M Fortune on Tesla Trades
Investor Claims Inadequate Advice Led to Massive Loss
Christopher DeVocht, an investor who reportedly turned an $88,000 investment into $415 million before losing it all, has filed a lawsuit against his investment firm and advisers. He alleges that they failed to provide him with sufficient advice as he engaged in risky trades.
Investment Firm Accused of Setting Up Risky Margin Account
DeVocht alleges that RBC Dominion Securities set him up with a margin account and large loans that ultimately led to his downfall, resulting in the loss of his entire investment portfolio, according to a report by Stockwatch on October 3. DeVocht amassed most of his wealth by trading shares and utilizing Tesla options.
Advisers Hired to Preserve Wealth Allegedly Failed
The investor, based in Canada, hired RBC and was assigned advisers. DeVocht claims these advisers were supposed to help him safeguard his wealth by suggesting strategies to mitigate risk. His team included a tax adviser from Grant Thornton LLP and an RBC employee who served as a financial planning "coach" for DeVocht.
Portfolio Wiped Out After Tesla and Market Crash
DeVocht's portfolio reached a peak of $415 million on November 30, 2021, but then plummeted in 2022 when Tesla and the broader stock market crashed. He was compelled to sell Tesla shares and repay loans from his margin account, leading to the obliteration of his portfolio.
Investor Blames Losses on Inadequate Advice
DeVocht believes his losses were partly due to inadequate advice from RBC and Grant Thornton LLP. He stated, "But for the defendants’ inadequate advice ... the plaintiffs would have preserved a substantial portion of their wealth and implemented financial planning that would not have resulted in the loss of their entire net worth.”
Case Demonstrates Risks Beyond Crypto Markets
While this case involves traditional stocks, a user named Kun pointed out to his 21,000 followers that such occurrences are not limited to the crypto markets.
Investor Seeks Court-Ordered Damages
DeVocht is seeking court-ordered damages, plus legal costs and interest. RBC Wealth Management Financial Services and Thornton were also named defendants in the lawsuit, which was filed in the Supreme Court of British Columbia in Canada. The defendants have yet to file a response.
Bottom Line
This case serves as a stark reminder of the potential risks involved in trading, whether it be in traditional stocks or cryptocurrencies. It also highlights the importance of receiving adequate advice and implementing sound financial planning strategies. What are your thoughts on this case? Do you believe the investor was given inadequate advice, or do you think he should have been more cautious with his trading strategies? Share your thoughts and this article with your friends. Don't forget to sign up for the Daily Briefing, delivered every day at 6pm.
