Out of Options: Commissioner Revokes Adviser’s Registration for Breach of Fiduciary Duties tied to Aggressive Options Trading

May 19

Randall Fields of San Antonio, Texas consented to the revocation of his registration as an investment adviser representative of his own state-registered investment advisory firm with the Securities Commissioner. The revocation is part of a consent order that Texas Securities Commissioner, Travis J. Iles, entered on May 19, 2021.

From April 2010 through March 2020, Fields was registered as an investment adviser representative of Sensus Wealth Management Group, LLC (“Sensus”).  Fields  was also the Chairman and Chief Investment Officer of OPCIÓN Investment Strategy, a division of Sensus which implements Sensus’ option investment advisory service for client accounts. During his time at Sensus, Fields solely traded options in client accounts. Specifically, he utilized an aggressive, high-risk strategy that involved simultaneously buying and selling call or put options at different strike prices to realize immediate profit based on the price spreads.

Fields assessed a performance fee equal to 25% of the monthly account trading profits (in excess of a hurdle rate) for the assets traded as part of the options strategy. As such, two clients of Fields agreed to allow Fields to trade options in their accounts based on Fields’ representation that he would only make money if they made money. However, due to the absence of a high-water mark, there were multiple instances where Fields assessed and collected a fee on the clients’ accounts despite an overall loss in the account.

Then, in 2016 – following expressed concerns from the clients, Fields agreed to reassess his implementation of a performance fee and implement a high-water mark. However, Fields miscalculated the initial high-water mark and consistently misapplied it across all the accounts of the clients. At times, he even ignored the high-water mark altogether.

Finally, in connection with the options trading, Fields opted to use broker-assisted trading through a trade desk rather than entering the trades himself. As such, clients incurred additional costs for each options contract—a cost that was not disclosed to the clients and could have been mitigated.

For the breaches of duties owed to his clients, Fields consented to the revocation of his registration with the Securities Commissioner. Fields is also ordered to cease and desist from engaging in fraudulent conduct.