SEC v. Craig Rumbaugh, et al. (2020)

Judgment entered

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In November 2020 the SEC announced consent judgments in California against adviser Craig Rumbaugh and his firms for steering eight clients, over $3 million, into notes issued by Susan Werth without disclosing $140,000 of commissions. They owe $676,000 of disgorgement plus $137,808 of interest jointly, and Rumbaugh a $192,768 penalty.

The record

Structured fields for this action, as recorded in our case library.
Agency	SEC
Release number	LR-24969
Date filed	2020-11-24
Date resolved	2020-11-24
Court	U.S. District Court, Central District of California
Status	judgment
Asset class	bonds, equities
Criminal parallel	No
Defendants	Craig Rumbaugh (individual) ; Rumbaugh Financial, Inc. (entity) ; Desert Strategic Equity, LLC (entity)
Cited as charged or alleged	Advisers Act s.206 ; Exchange Act s.10(b) and Rule 10b-5 ; Exchange Act s.15(a) ; Securities Act s.17(a) ; Securities Act s.5 (statutes and rules cited in the document; not a finding that they were violated)
Techniques

What was ordered

Civil penalty: $193k
Disgorgement: $676k
Prejudgment interest: $138k
Total relief: $1m
Alleged gain: —

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars.

What is alleged to have happened

The SEC announced the judgments of November 20, 2020 on November 24, 2020 (LR-24969); the case is 5:19-cv-01517. Werth turned out to be running a Ponzi scheme, and three clients lost over $650,000. Rumbaugh was charged with misleading clients and concealing self-dealing, not with operating the scheme.

The Ponzi tag is removed: Werth operated the scheme, and Rumbaugh is charged as a conflicted adviser. The record omitted the penalty and named "Rumbaugh et al".

Timeline

2020-11-24 Litigation release published

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

SEC litigation release

The linked release is a work of the United States government and is not subject to copyright. Our summary and narrative above are our own writing.

Record added September 10, 2026. submit a correction.