On November 24, 2020, Craig Rumbaugh settled charges that he defrauded advisory clients by misleading them about the terms of their investments, failed to disclose Respondent’s self-dealing and receipt of commissions in connection with those investments. The SEC alleged that Rumbaugh, and two companies he owns and controls Rumbaugh Financial (“RF”), a California-registered investment adviser, and Desert Strategic Equity (“DSE”), offered and sold securities in unregistered offerings and, with DSE’s substantial assistance, also acted as unregistered broker-dealers. Rumbaugh advised clients to invest in promissory notes offered by Susan Werth who, unbeknownst to Rumbaugh, was operating a Ponzi scheme. Rumbaugh had no knowledge that Werth was running a Ponzi scheme and did not knowingly participate in Werth’s Ponzi scheme. Werth paid Rumbaugh 5% commissions on all funds raised from his clients, totaling more than $140,000 in commissions paid during that period. Rumbaugh and RFI failed to disclose those commissions to each of their clients when recommending investments with Werth’s companies. Many times, Rumbaugh also misled clients about the interest rates Werth’s companies were willing to pay, claiming that the companies offered rates in the 5% to 10% range when, in fact, they offered 30% interest or more. In those instances, when Werth’s companies repaid investor funds in full at the true, higher interest rates, RF repaid RFs clients at the lower rates, and Rumbaugh kept the difference for himself. [https://www.sec.gov/litigation/complaints/2020/comp24969.pdf] and [https://www.sec.gov/litigation/admin/2020/34-90508.pdf]