The billionaire Los Angeles Dodgers owner Mark Walter’s sprawling investment empire is facing scrutiny from US prosecutors, who have been investigating potential financial improprieties at two of his insurance companies and at Guggenheim Partners LLC, according to people with knowledge of the matter.
Walter’s Delaware Life Insurance Co. and Clear Spring Life and Annuity Co. received grand jury subpoenas in February, according to previously unreported regulatory filings. Prosecutors in Manhattan have asked about the companies’ failure to disclose that billions of dollars of their private credit holdings backed other parts of Walter’s business ventures, the companies said in the June 26 filings. The investigation is being conducted in parallel with the US Securities and Exchange Commission, the companies said.
The subpoenas followed inquiries by prosecutors last year into Guggenheim’s $362 billion money management arm, said some of the people, who spoke on condition of anonymity to discuss confidential matters. Part of the inquiry into Guggenheim involved representations the company made to outside parties about its revenue, said the people. The current status of the probe into Guggenheim wasn’t clear.
The Federal Bureau of Investigation executed at least one search warrant in September to seize a mobile phone, some of the people with knowledge of the matter said. It couldn’t be determined which part of the investigation the seizure related to.
Probes by prosecutors and regulators can end without charges or enforcement actions.
Walter is best known for his ownership stakes in premier sports teams, including Major League Baseball’s Dodgers, the Los Angeles Lakers basketball team and the UK’s Chelsea soccer club. Walter’s holding company, TWG Global, holds stakes in the teams as well as the insurers and in Guggenheim, where he’s chief executive officer.
“TWG is aware of and cooperating with the investigation,” the firm said in a statement. A Guggenheim representative had no immediate comment. Group 1001, the parent company of Delaware Life and Clear Spring, said it’s cooperating with investigators and that its financial condition remains strong.
The SEC and US attorney’s office in Manhattan declined to comment. The FBI didn’t immediately respond to a request for comment.
As Guggenheim CEO, Walter helped lead Wall Street’s conquest of the life insurance industry, with money managers taking control of carriers and using policyholder funds to bet on sometimes opaque and illiquid private credit investments.
The development has prompted scrutiny from state regulators, who worry about the safety of investments and about conflicts of interest between fund managers and policyholders. Treasury Secretary Scott Bessent has met with insurance regulators to discuss the industry’s growing exposure.
Key to Walter’s financial empire are Delaware Life, with $69 billion of assets as of March, and Clear Spring, with $16 billion.
The investigation into the insurers revolves around whether they failed to properly characterize some of their private credit investments as involving related parties, the companies said in the June filing. After getting the subpoenas, the companies conducted an internal investigation and discovered “errors” in financial reporting, the companies said. This led them to reveal that they’re far more intertwined with other parts of Walter’s businesses than previously known.
For instance, Delaware Life revealed that it had $16 billion more private credit assets linked to affiliates than it had previously reported, the filing shows. That restatement caused Delaware Life’s total related party investments as of Dec. 31 to jump to at least $17 billion, or at least 39% of total invested assets, compared with the $1.4 billion, or 3%, reported earlier this year.
Delaware Life is now carrying out a “remediation plan” to reduce its exposure to affiliated investments and to improve financial controls, according to a note last week from S&P Global Ratings that cited the filing. S&P lowered its outlook on the company from “stable” to “negative” because of the disclosures, while affirming a credit and financial strength rating of A-.
“Our capital position and liquidity remain strong, and our financial strength ratings are unchanged,” Group 1001, the insurers’ parent company, said in its emailed statement to Bloomberg News. “We remain focused on delivering exceptional value and service to our contract and policyholders and their financial representatives.”
Company filings don’t show how long ago Delaware Life and Clear Spring began investing in the private-credit assets at issue, but they date back more than two years. Based on the recent restatement, Delaware Life’s related-party investments amounted to more than $11 billion as of December 2024, the company said.
Written by: Zachary R Mider and Ava Benny-Morrison — With assistance from Alexandre Rajbhandari and Sridhar Natarajan @Bloomberg
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