Federal investigators are looking into potential financial improprieties tied to Mark Walter’s business empire, including Guggenheim Partners and two insurance companies he controls, according to Bloomberg.
The probe involves both the Federal Bureau of Investigation and a parallel Securities and Exchange Commission investigation. Bloomberg reported that prosecutors are examining Walter’s Delaware Life Insurance Co. and Clear Spring Life and Annuity Co. as well as Guggenheim, with the interest in the insurers coming more recently than the review of Guggenheim’s money management, which began last year.
Walter controls the insurers and holds a stake in Guggenheim through TWG Global, the holding company tied to his broader portfolio. The companies said in a June filing that the investigation centers on whether the insurers failed to properly identify some private credit investments as related-party transactions. After receiving subpoenas, the companies carried out an internal review and said they found “errors” in financial reporting, revealing they were more closely connected to other parts of Walter’s businesses than had previously been known.
The insurance businesses mainly handle retirement annuities and life insurance, investing customers’ money so they can pay those obligations later. In practical terms, the question is whether Walter’s insurers put billions into private loans instead of buying them on the public market, whether those loans were tied to Walter’s own companies, and whether that connection was hidden.
That kind of arrangement draws close scrutiny because policyholders have a right to know where their money is going, and conflicts of interest can surface when insurers invest consumer funds in affiliated companies.
Walter has not been accused of wrongdoing, and these kinds of investigations can end without charges or enforcement action. Bloomberg noted that similar cases rarely make it into court.
TWG Global and Group 1001, the parent company of both insurers, said in statements that they are cooperating with the investigation.
Walter’s sports portfolio is extensive. He is the controlling owner of the Dodgers and recently completed a purchase of the L.A.
Lakers. He also owns the WNBA’s L.A.
Sparks, Chelsea FC of the Premier League, the Cadillac Formula 1 team, and the entire Professional Women’s Hockey League.
For now, none of those teams are affected by the investigation. If the matter escalates and Walter is charged with wrongdoing or crimes, though, each league could be forced to decide whether he would have to sell.
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