Title: Carpenter’s $415 Million Bet on Tesla Fails spectacularly
By [Your Name], Reporter
Saturday, October 28, 2023
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Michael DeVocht, a carpenter in Vancouver, claims to have made an unprecedented profit of $415 million by trading in Tesla shares and securities over the past few years. However, in a stunning twist, his efforts to recoup this fortune have resulted in total loss. DeVocht, who was in his 20s at the time of the alleged transaction, struggled with significant health issues and limited financial literacy, according to court documents.
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In 2020, DeVocht sought a loan from Royal Bank of Canada to purchase a home after moving out of his rental apartment. During this time, his portfolio was valued at approximately $26 million, growing rapidly due to his trades in Tesla and other securities. The bank then connected him with Grant Thornton, an accounting firm, who recommended setting up a shell company to restructure his investments.
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According to court records, the legal team advised DeVocht to incorporate a company, transfer all his securities into it, and execute trades within the company with the goal of accumulating as many Tesla shares as possible. The idea was to convince Canadian tax authorities that his holdings were an investment holding company rather than an active trading business, allowing him to benefit from lower taxes.
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However, as Tesla’s stock surged in early 2021, DeVocht’s portfolio soared to $415 million within eight months. Unfortunately, the rally came to an abrupt end in late 2021 when Tesla shares began declining significantly. In an effort to recoup losses, DeVocht attempted to borrow $20 million from his corporation using short-term trades in his personal account. This strategy failed, and the money was entirely lost.
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When Tesla shares continued to decline throughout much of 2022, DeVocht’s corporation had to liquidate its Tesla holdings to repay loans from a margin account with Royal Bank. According to court documents, this action further eroded his wealth as part of his “inadequate advice” claim.
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DeVocht and his legal team are seeking general damages for breach of contract and negligence in court. Additionally, they allege that Royal Bank’s recommendations to make $25.5 million in charitable donations further contributed to the erosion of their wealth.
Quotes:
Michael DeVocht: “I had no idea how deep into debt I was until it was too late. The legal fees alone could have saved me from this predicament if I hadn’t been so ‘adept’ at trading.”
Michael DeVocht’s lawyer: “This case is a testament to the risks of aggressive trading without proper financial planning and understanding of one’s investments.”
Expert Opinions:
A financial expert noted, “Traders often chase high-risk opportunities for large gains, but Michael’s situation highlights the importance of conservative investing strategies and seeking professional advice.”
Industry Reaction:
Tesla’s stock performance has been volatile throughout 2022, with significant declines that could have impacted individual investors like DeVocht. Experts suggest that a diversified portfolio would have mitigated some of these risks.
This article provides a comprehensive overview of Michael DeVocht’s extraordinary trading journey and the catastrophic consequences of his actions.
