Here's the official claim filed by plaintiff DeVocht, which is pretty short and readable, though my summary below is all you need.
Summary:
Christopher DeVocht, a 34-year-old former carpenter from Sooke, British Columbia, went from minimal savings to an account valued at $415m and is now back to square one. He achieved this thanks to very aggressive trading in Tesla shares and options. He has now filed a lawsuit against RBC and accounting firm Grant Thornton. The suit, filed in the Supreme Court of British Columbia on October 1, 2024, claims that poor financial planning and tax advice from the defendants led to the loss of DeVocht's entire investment portfolio.
According to the lawsuit, DeVocht's journey began in his early 20s when he started investing through an RBC Direct Investing account. By June 2020, when he was 30 years old, his portfolio, consisting mainly of Tesla shares and options, had grown to about $26 million. As his wealth increased, DeVocht sought professional advice from RBC and Grant Thornton.
The plaintiff alleges that the defendants failed to properly assess his financial sophistication and objectives. They advised him to incorporate a company, 1267912 B.C. Ltd., and pursue a tax strategy that encouraged maintaining a high concentration in Tesla stock. This strategy, along with trading on margin, allegedly amplified risks and made transitioning to a lower-risk portfolio more difficult. The claim says DeVocht was twice advised to donate to the RBC Charitable Gift Fund in order to obtain charitable tax credits, giving approximately $8.5 million in December 2020 and then another $17 million one year later.
Despite the portfolio reaching a peak value of about $415 million by November 2021, sharp declines in Tesla's stock price in 2022 led to substantial losses. DeVocht claims that the defendants' advice, including recommendations for large charitable donations, prevented him from preserving his wealth when the market turned against his position.
The lawsuit seeks general damages for breach of contract and negligence, disgorgement of fees and commissions, and special damages. The plaintiffs argue that with proper advice, they would have preserved a substantial portion of their wealth.
The professionals involved:
Please note that this claim was only filed October 1st and none of the defendants have yet filed a defence. The defendants are Grant Thornton and RBC.
The financial professionals implicated in this lawsuit are:
- Luke Sprungmann: An RBC Private Banking representative who initially handled Mr. DeVocht's inquiry about obtaining a loan against his trading account equity.
- Chris Delorme: An RBC advisor. He was the main point of contact for Mr. DeVocht and coordinated the team of professionals providing advice. Mr. Delorme was responsible for much of the financial planning advice and later took over the role of executing trades on behalf of the plaintiff.
- Michael Stubbing: An accountant from Grant Thornton LLP who provided tax planning advice to Mr. DeVocht.
While not individually named as defendants, these professionals' actions are central to the plaintiffs' claims against their respective firms (RBC Dominion Securities Inc., RBC Wealth Management Financial Services Inc., and Grant Thornton LLP).
The lawsuit alleges that these professionals, particularly Chris Delorme and Michael Stubbing, failed to properly assess Mr. DeVocht's financial sophistication, needs, and objectives. They are accused of providing inadequate advice that led to the maintenance of a high-risk, concentrated position in Tesla stock, ultimately resulting in the loss of the plaintiffs' entire investment portfolio.