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Meet The "AAPL Trading Guru" Who Blew Through 99% Of His AUM, Ending With Just $32,362.84

Several weeks ago we reported the amazing case of one Owen Li, a former portfolio manager of disgraced and incarcerated insider trader Raj Rajaratnam, whose Canarsie Capital had somehow managed to blow through 99.8% of its AUM in 9 months, starting with $100 million in March and finishing, literally, with $200,000, after suffering massive losses during the failed December "Santa Rally." According to a letter he sent to investors, he "truly sorry," for "acting overzealously." Of course, the apology wouldn't get any of the lost money back, giving his investors a lot of time to contemplate just how stupid they were to hand over a hundred million to an incompetent hack whose only virtue was the reputation of being a professional when it comes to investing. A reputation that was clearly false.

Meet the ironically named Roger Bliss: an absolute amateur when it comes to investing, but the very definition of professionalism when it comes to lying, cheating, misrepresenting and stealing the money of gullible investors.

Roger Bliss runs Roger Bliss and Associates Equities, LLC, which is supposedly an "investment club" and has had tremendous success day-trading Apple stock, achieving annual returns for his investors of between 100 to 300%. Bliss tells investors he has never had a trading day in which he has lost money in the past six years. Bliss claims to be managing in excess of$300 million of which approximately $260 million is his own equity in the fund. Bliss also claims there is no risk for investors as he indemnifies them against the loss of their principal.

Bliss operates his purported business out of a large, nice home. He claims to own a vacation property in a resort area in Utah, an airplane, and expensive toys, such as a sailboat and all-terrain vehicles. He tells investors that he enjoys vacations sailing in the Caribbean. Bliss also tells investors and potential investors that he established the investment club with the assistance of attorneys. Bliss claims that due to the size of his accounts, he is regularly audited by the Commission and has twice-yearly telephone conversations with staff at the Commission, thereby creating the appearance of compliance with laws and regulations.

There is only one problem: it is all nothing but one non-stop, epic lie.

As the SEC disclosed three days ago when it charged Roger Bliss and his various fabricated and made up corporate entities, any time investors hope to get rich quick and hand over their money to those who promise untold upside, riskless profits, and boast with a flawless trading history, they will end up even faster dazed, confused and broke with all their money gone, and again, asking themselves just what on earth happened.

In the case of Roger Bliss' investors, here is the true story of how they lost everything just because they believed a sly con man:

  • Contrary to Bliss' representations, Bliss' trading has not been profitable. Bliss' brokerage account shows that from January 1, 2012 through January 12, 2015, Bliss incurred losses totaling approximately $3,299,689. That same trading account also showed an ending balance on December 31, 2014 of only $32,362.84. Bliss advanced his scheme by generating falsified trading records and account statements showing successful trading. Bliss also failed to use investor funds for his stated purpose of day-trading.

But before we get into the detail of what Bliss was doing, here is a summary of what he said he was doing.

  • Roger S. Bliss . Age 56 and a resident of Bountiful, Utah. Bliss purports to run an investment club and to be responsible for day-trading the investment club's assets for profit. From approximately 2008 to the present, Bliss has been offering and selling investments to individuals and has been offering investment advice.
  • Roger Bliss has been day trading Apple Inc. stock since 2008.
  • Bliss claims that friends asked him to trade funds on their behalf, but Bliss declined at first. According to Bliss, he taught investment seminars and traded for his own account for about a year until he felt comfortable enough with his proficiency and results to trade with his friends' money.
  • Bliss claims that he consulted attorneys and decided to structure his program as an investment club because this would not require him to be registered as an  investment adviser or broker dealer.
  • Bliss is currently soliciting investors and offering them memberships in his "investment club."
  • Bliss represents to investors and potential investors that his investment club operates as a limited liability company.
  • Bliss tells investors and potential investors that he maintains an equity position greater than 50% of the total value ofthe investment club's assets, which he says is a requirement of an unregistered investment club. Bliss claims his investment club has thirty to thirty-five investors and holds over $300 million in funds, ofwhich approximately $260 million consists of Bliss' personal funds.
  • Bliss has represented to investors that he holds the investment club funds in four to sixteen accounts held at TD Ameritrade ("TDA''). Bliss states that he trades only AAPL stock, which is the largest capitalized stock in the U.S. markets.
  • Bliss claims to have an excellent trading record and that he has never had a trading day where he lost money in the past six years. Bliss represents that investors can expect to earn a 100% return on investment each year, but that returns will likely be higher because he has made 200% and 300% returns for investors for a number of years. Bliss claims that one couple invested $300,000 with him approximately six years ago which Bliss was able to grow to between $20 and $30 million through his trading activities.
  • Bliss represents to investors and potential investors that when he trades other people's money, he takes "50% of the upside" so that earnings are split. Bliss provides  written agreements to investors which state that Bliss "accrues 50% of all profits generated for his management and investing skill."
  • Bliss asserts to investors and potential investors that they need only contribute money, that Bliss will combine their money with other investor monies and Bliss'  personal monies into a pooled fund to make profits through day-trading AAPL stock.
  • Bliss tells investors that he will conduct all trading on behalf of the pooled fund, that he will manage all the assets of the pooled fund, and that he and the investors will share in the profits from the pooled fund.
  • According to Bliss, the remaining 50% of profits are shared by investment club members, based on their percentage of equity in the club. Even after the 50% split, Bliss represents to investors they will still earn at least a 100% return on their investment because Bliss is actually earning a 200% to 600% total annual return.
  • Bliss guarantees to investors and potential investors that he will indemnify all investment club members for any loss to principal. He has stated that he indemnifies investment club members from any loss "just because I can." Bliss provides written agreements to his investors which state that "Roger Bliss shall indemnify Club members from any losses to the initial contribution to equity."
  • Bliss tells investors and potential investors that the Commission audits his trading accounts a few times each year and that the Commission calls him twice each year as part of the Commission's anti-money laundering efforts, due to the sheer size of Bliss' accounts.
  • Bliss provides account statements to his investment club members through a website (www.millcreekequities.com or blissclubllc.com) accessible by members with a password. Bliss originally used the website, www.millcreekequities.com, which displayed the logo ofThinkOrSwim, a brokerage firm that was acquired by TDA in 2011. Bliss stopped using the site after the website host notified Bliss on December 17, 2014 that using ThinkOrSwim's logo was a trademark violation. Bliss started using the website blissclubllc.com in January 2015.
  • Bliss provided a document to at least one investor that purportedly represented an account statement for one of Bliss' TDA accounts. The document was dated January 8, 2015 and showed a balance of over $85 million in the account. The statement showed a profit for YTD 2015 (a period of 5 trading days) of over $4.9 million. Bliss provided a false account number on the purported statement.
  • Statements provided to one investor through the website, blissclubllc.com, showed that from December 18, 2014 through January 23, 2015, the investor's account balance increased in value from $550,000 to over $650,000. Another investor deposited $400,000 with Bliss on January 15, 2015 and the investor's account balance shown on the blissclubllc.com website as of January 30, 2015 was $448,244, an increase of$48,244.
  • Bliss attests to investors that the statements on the website show investment club members how much money they hold in the investment club, their deposits and  withdrawals, and their earnings.
  • From December 18, 2014 to the present, Bliss has raised at least $950,000 from at least two investors. In addition, during 2014, Bliss deposited approximately $7,421,000 from his bank account to his TDA account. These deposits appear to be from investors.
  • Bliss continues to solicit investments. In January 2015, Bliss represented to TDA that he planned to add $2 to $3 million to his account.

As noted earlier, all of this was lies. Contrary to Bliss' representations, his brokerage records show that Bliss suffered substantial losses for the years 2012 through the present. Bliss' account suffered a loss of $718,982 in 2012; $1,195,111 in 2013; and $1,364,593 in 2014. From January 1, 2015 to January 15, 2015, the account lost $19,004. The total loss from 2012 to the present is $3,297,690. That same trading account also showed an ending balance on December 31, 2014 of only $32,362.84. In other words, Bliss had managed to burn through nearly 100% of his entire assets under management.

How did Bliss end up collecting so much money in the first place? Bliss represented to investors that all monies invested will be pooled together with other investor funds and his personal funds into a brokerage account to trade AAPL stock for profit. During December 2014 and January 2015, Bliss collected at least $950,000 from investors.

Investors wired monies to Bliss' personal bank account at Wells Fargo Bank. Bliss represented he would transfer those investor funds to his brokerage account(s) to be used for trading, and in fact told two investors that investment monies would be transferred from Bliss' bank account to his trading account(s) within one day.

Unfortunately for his investors, like every other trading fraud, instead of using the deposited money to trade, Bliss promptly pulled them out for his own personal use.

TDA brokerage records show that from October 28, 2014 to January 6, 2015, Bliss made no deposits into his brokerage account, even though he received a cash investment of$350,000 on December 18,2014 and told the investor he would transfer the funds to his brokerage account and begin trading with the funds the following day. Likewise, Bliss collected $400,000 from another investor on January 15, 2015, the same day his TDA account was closed. Bliss has not deposited the $400,000 into another brokerage account. Bliss did not deposit funds into his TDA account, as represented to investors in December 2014 and January 2015. Although Bliss made a deposit of $900,000 to his TDA  account on January 6, 2015, he almost immediately withdrew $350,000 on January 8, 2015. Bliss had just $563,359 in his sole trading account at TDA on January 15,2015, the day TDA closed the account. Although Bliss opened a brokerage account at TradeStation Group, Inc. on January 14, 2015, he had executed no trades in the account as of January 30, 2015. Therefore, Bliss has not been day trading investor funds, as represented.

A sucker is born every minute, and when it comes the "trading" of Bliss, an endless line of suckers was lining around the block just waiting to give their money to the con man. Why?

Simple: they believed his lies about his past trading success. In the words of the SEC:

  • Bliss tells investors and potential investors that, although he has made bad trades, he has never had a trading day where he has suffered a loss in the past six years.
  • Bliss claims that he has made at least a 100% return each year, and has made 200% to 300% returns in several years for investment club members. Bliss claims that he actually makes double those returns through his day-trading, but the 100% to 300% returns represent the 50% split to investment club members.
  • Bliss has provided written statements to potential investors purporting to show substantial profits in the millions of dollars. Bliss told at least one investor in January 2015 that he averaged profits of about $920,000 per day, and that he was averaging profits of over $2 million per day during 2015 in his investment club.
  • Bliss appears to have a computer program that he uses to generate fictitious trading records and account statements. Bliss invites potential investors to his home office, which has five to ten computer monitors purportedly displaying stock trading activity.
  • In January 2015, Bliss provided an investor with a purported account statement for a TDA account. The statement purported to show trading activity for one day, January 8, 2015. Bliss told the investor the statement showed one of the investment club's actual trading accounts with a balance of$85,278,933, a profit for the day of $1,479,473, and a year-to-date profit of $4,959,290. As noted above, the statement did not represent actual trading by Bliss.
  • Bliss provides investors with purported account information through a secure website (www.millcreekequities.com or blissclubllc.com) accessible by password. Bliss represents that the website shows account information for each investment club member.
  • One investor's transaction history from December 18,2014 to January 23, 2015 showed total deposits of$550,000 and a profit for that time frame of$101,360.92. Another investor's account information showed that the $400,000 he invested was deposited into the brokerage account for trading on January 16,2015, and that he had earned over $48,000 by January 30, 2015.
  • In correspondence with the web site host for his website, Bliss represented that he uses the secure website to mentor traders to report virtual trading results as they  learn, thereby indicating the information contained in the website is not actual trading data. The account statements and information provided to investors by Bliss are fabricated. Bliss misrepresents that they are actual trading records.

Again: one epic, non-stop lie. In fact, it was so bad that the registration for the only limited liability company known to be operated by Bliss, "Roger Bliss and Associates Equities, LLC," expired in May 2014!

However what is most confusing, and most shocking, is just how willing everyone was to give Bliss not pocket money but tens and hundreds of thousands of dollars to "manage" without any actual diligence, or any background check. All that was necessary was for the con man to "create the appearance of legitimacy" and "creating the appearance of compliance with laws and regulations."

And in a world in which "appearance" trumps substance any day, and is all that matters, in which the very market itself is one big manipulated lie but "appears" to be at an all time high, who can blame the countless naive, gullible dreamers who bet it all on a "get rich scheme", ignored every clear sign the dream was too goot to be true... and lost everything.

Besides themselves, of course.

Source: SEC