[ by Howard Haykin ] The SEC charged a Phoenix-based investment adviser and his firm on Wednesday with failing to disclose his close ties in two private businesses even as he actively promoted them as investments to firm clients.  Later, when financial difficulties prompted the adviser to sell his stake in one of the businesses, he exploited a client by grossly inflating the value of the firm causing the client to overpay for his stake. The Players. Oxford Investment Partners, LLC, is an investment adviser located in Phoenix, AZ, which registered with the SEC in March 2003.  Oxford provides discretionary advisory services to 364 client accounts, and non-discretionary advisory services to 25 accounts.  The firm held $224 million in assets under management. Walter Clarke, 49, is Oxford's founder, president and sole control person.  At all relevant times, Clarke was responsible for the management of Oxford’s business and solely responsible for identifying, recommending and assessing potential investment opportunities on behalf of Oxford’s clients. Clarke holds a Series 65 license, after having passed the Uniform Investment Adviser Law examination administered by FINRA. Oxford Stix is a pooled investment vehicle that Oxford and Clarke created in 2006 to invest assets of Oxford’s clients in HotStix - a privately-held company in Arizona that provided golf club fittings.  Oxford served as investment adviser to Oxford Stix, and 4 Oxford clients were members of Oxford Stix.  In 2006, Oxford Stix invested some $900K in HotStix, and an additional $40K in November 2008. The Center for Wealth Management ("CWM") is an entity that Clarke co-founded in 1999 that offers financial planning courses through colleges and universities in California and Arizona. SEC Findings and Allegations. Walter Clarke allegedly 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.  Both investments later failed.  As noted above, when Clarke ran into financial difficulties, he inflated the value of his firm, Oxford, by at least $1.5 million - saying that its value was 10 million.  He then sold the client a 7.5% stake for $750,000 - reflecting an overpayment of at least $112,000. Clarke allegedly convinced 3 clients in late 2007 and early 2008 to fund more than $300,000 in loans originated by Cornerstone Funding Group.  However, the clients were never told that Clarke was a co-owner and would personally profit from successfully originated loans.  Within months of the loans being funded, the underlying borrowers defaulted, causing the clients to lose their investments.  In November 2008, Clarke convinced 4 clients to invest about $40,000 in HotStix;  again, the clients were not told that owners of HotStix were also co-owners and paid consultants of Oxford.  Shortly after the clients made these investments, HotStix sought bankruptcy protection and the clients lost their money. Apparent Violations. This matter concerns fraud and repeated breaches of fiduciary duty by Oxford, a Phoenix-based RIA, and Clarke, Oxford’s owner and principal.  Oxford and Clarke are charged with willfully violating Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder.  The SEC will seek disgorgement civil penalties cease and desist orders. SEC Staff Credits. Investigation by Paris Wynn, Mr. Sprung, who work in the LA Regional Office and are members of the Enforcement's Asset Management Unit.  Securities compliance examiner Ryan Hinson conducted the related examination, supervised by Daniel Jung. Litigation will be led by Mr. Wynn and David Van Havermaat. For further details, go to:   [SEC PR 12-105, 5/30/12] and [SEC Litigation Order].