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May 31, 2012updated 04 Apr 2017 3:39pm

SEC charges Phoenix-based investment advisor and firm with fraud

US-based Securities and Exchange Commission (SEC) has charged a Phoenix-based investment adviser and his firm for having recommended investments without telling clients about his personal stake and for exploiting a client who was buying an ownership share in the firm.

By Verdict Staff

The Enforcement Division of SEC has alleged that Walter J. Clarke advised clients at Oxford Investment Partners to invest in two businesses without disclosing the conflicts of interest that he co-owned one of them and had financial ties to the owners of the other.

However, both the investments later failed and when Clarke’s own financial problems prompted him to sell a stake in Oxford to a client, he fraudulently inflated the value of his firm by at least US$1.5 million to make the client overpay by at least US$112,000.

Marshall S. Sprung, deputy chief of the SEC enforcement division’s asset management unit remarked "Clarke breached that duty by deliberately overvaluing the firm and staying mum on his personal ties to the recommended investments."

SEC’s order specifies that Oxford and Clarke has willfully violated Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder.

The SEC’s investigation was conducted by Paris A. Wynn and Mr. Sprung, who work in the Los Angeles regional office and are members of the enforcement division’s asset management unit.

Meanwhile, securities compliance examiner Ryan Hinson had conducted the related examination under the supervision of Daniel C. Jung.

The SEC’s litigation will be led by Mr. Wynn and David Van Havermaat.

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