Federal prosecutors and the SEC are investigating two insurance companies controlled by billionaire Mark Walter after a whistleblower complaint alleged financial irregularities. The investigation centers on Delaware Life Insurance Co. and Clear Spring Life and Annuity Co., with scrutiny over whether they properly disclosed that billions of dollars in private credit investments were actually related-party transactions involving other entities within Walter's business empire. The companies, which together reported $85 billion in assets as of March ($69 billion for Delaware Life and $16 billion for Clear Spring), disclosed in June filings that federal grand jury subpoenas were issued in February, following earlier inquiries into Guggenheim Partners, where Walter is also involved.
Initially, Delaware Life reported only $1.4 billion in related-party investments. However, after the subpoenas, internal reviews uncovered "errors" in financial reporting, leading to disclosures that revealed a much deeper entanglement with Walter-controlled entities. One report indicates that Delaware Life's related-party investments actually totaled at least $17 billion, representing 39% of its total invested assets. This expansion in reported related-party assets has prompted S&P Global Ratings to shift Delaware Life's outlook from stable to negative, though its A- financial strength rating has been maintained.
The investigations are also examining Guggenheim Partners LLC, Walter's money management firm. The FBI seized a mobile device in September as part of the broader probe, although the specific connection to the various strands of the investigation is not yet clear. Walter's holding company, TWG Global, and Group 1001, the parent company of the two insurers, have stated they are cooperating with the investigation. Walter, who owns stakes in the LA Dodgers, LA Lakers, and Chelsea Football Club, has not been accused of personal wrongdoing, and the investigations could conclude without charges.
