Carpenter claims he made $415 million on Tesla, then lost it all

financialpost.com:

Christopher DeVocht, a carpenter from Vancouver Island, says he started out like a lot of day traders. After work, he’d read about trading on forums. His favourite things to trade were options on Tesla Inc. stock.

Then he went on what has to be one of the hottest hot streaks in the history of financial markets, according to a legal filing. At the end of 2019, his account, with the brokerage division ofRoyal Bank of Canada, was worth $88,000. Within two years, he’d turned that into $415 million, he says.

Some people would have cashed out. DeVocht didn’t. And when Tesla stock fell in 2022, he lost it all, according to a lawsuit he filed this week against RBC Dominion Securities, RBC Wealth Management and accounting firm Grant Thornton LLP. The filing, which is an initial notice of claim that doesn’t require evidence to be provided at this stage, didn’t include brokerage statements or other proof of his gains or losses.

DeVocht now claims that the advice he received, geared mainly toward minimizing taxes, was negligent and failed to take into account his level of financial sophistication. His Tesla investment strategy involved loans from a Royal Bank margin account.

“RBC considered Mr. DeVocht to be a sophisticated investor,” according to the complaint. “While this was true in respect of his strategies for put and call options in the trading of Tesla shares, RBC failed to appreciate that Mr. DeVocht’s knowledge of investing more generally, of financial planning, and of tax was in fact limited.”

Royal Bank had no immediate comment Friday and hasn’t yet filed a defence in the case. DeVocht’s lawyer, Sean Hern, declined to comment beyond the complaint. Grant Thornton said it doesn’t comment on matters before the court.

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