“Don’t think it can’t get any worse, because it can.” -- Former Washington Wizards coach Flip Saunders (2012)

The famous quote above from former Wizards coach Flip Saunders was on point in 2012, as his terrible Wizards team circled the drain just before he was fired. But Coach Saunders' wisdom applies in other contexts, as well.

Take the SEC's recent case against Roger S. Bliss. Sure, things looked like they couldn't get much worse for Bliss when the SEC sued him in February 2015 for a scheme that was allegedly quite audacious.  According to the SEC, Bliss represented to investors that, among other things,

he could return at least a 100% profit per year to investors through his day-trading in Apple stock;

that he had never had a trading day where he had lost money in the last six years; and

that he "trades over $300 million in assets," of which approximately $260 million is his own equity in the fund. 

The SEC claimed that, in fact:

Bliss' trading had not been profitable and that from January 1, 2012 through January 12, 2015, Bliss incurred total losses of $3,299,689;

On December 31, 2014, Bliss' brokerage account held just $32,362.84;  

Bliss carried out his scheme by "generating falsified trading records and account statements showing successful trading;" and

Bliss also failed to use investor funds for his stated purpose of day-trading. 

That was the very bleak state of affairs for Bliss when the SEC filed its case on February 11, 2015. Could things, as Coach Saunders taught us, actually get any worse? Well ... in a Litigation Release issued yesterday, the SEC stated that after a court imposed an asset freeze against Bliss in connection with the February lawsuit, 

The SEC thereafter learned that Bliss concealed his ownership of a catamaran sailboat and secretly transferred possession to his brother-in-law, Kevin Fortney.  After the SEC moved for civil contempt against Bliss for violating the asset freeze, both Bliss and his brother-in-law, who was not charged in the SEC’s enforcement action, filed sworn declarations that the sailboat was owned by the brother-in-law and not by Bliss. In an order issued on August 14, the court found Bliss in contempt of the asset freeze order and referred the matter to the U.S. Attorney’s Office for the District of Utah for potential criminal charges. The U.S. Attorney’s Office presented the case to the grand jury. The resulting criminal charges against Bliss are based on the same violations of the asset freeze order that were the basis of the SEC’s civil contempt motion.

Now, the SEC stated, both Bliss and Fortney face potential prison sentences of up to 15 years each and a monetary fine of up to $250,000 for each charge. 

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