In the Matter of Oxford Investment Partners, LLC and Walter J. Clarke, AP File No. 3-14899. On May 30, 2012, the SEC issued an Order Instituting Cease-And-Desist Proceedings against Phoenix-based investment adviser Walter Clarke for concealing his personal stake in the investments he recommended to clients. Clarke advised clients at Oxford Investment Partners to invest in two businesses without disclosing conflicts of interest, namely that he co-owned one and was financially tied to the other. In 2007 and 2008, Clarke convinced three clients to fund $300,000 in loans originated by Cornerstone Funding Group, a company co-owned by Clarke. The clients were not informed of Clarke’s personal stake in Cornerstone or that he stood to profit from the business. The borrowers defaulted on the loans and the clients lost their investments. In another transaction in 2008, Clarke persuaded four clients to invest $40,000 in a privately-held company, HotStix without telling them that the company’s owners were also co-owners and paid consultants of Oxford. A short time after the clients made the investments, HotStix went bankrupt and the clients lost their investments. Clarke’s own financial problems prompted him to sell a stake in Oxford. Clarke fraudulently inflated the value of his firm by more than $1 million to make the client overpay for the ownership interest.
Oxford and Clarke are charged with willfully violating Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act and Rule 206(4)-8 thereunder. The SEC is seeking civil penalties, disgorgement and a cease-and-desist order.