Federal prosecutors and the US Securities and Exchange Commission (SEC) are investigating Mark Walter's financial empire, specifically targeting his insurance companies, Delaware Life Insurance Co. and Clear Spring Life and Annuity Co., and Guggenheim Partners LLC. The investigation into the insurers, which received grand jury subpoenas in February, centers on their alleged failure to properly disclose private credit investments that backed other entities within Walter's business ventures. An internal investigation by the companies revealed "errors" in financial reporting, showing they were more intertwined with Walter's other businesses than previously known.
Delaware Life, which held $69 billion in assets as of March, significantly restated its related-party private credit assets. It revealed an additional $16 billion in such assets, increasing its total related-party investments as of December 31 to at least $17 billion, or 39% of total invested assets, up from the previously reported $1.4 billion, or 3%. These investments date back over two years. In response, Delaware Life is implementing a "remediation plan" to reduce affiliated investments and improve financial controls. S&P Global Ratings subsequently lowered its outlook on Delaware Life from "stable" to "negative" while affirming its credit and financial strength rating of A-.
Separately, prosecutors had also initiated inquiries last year into Guggenheim's $362 billion money management arm, probing representations made by the company to outside parties regarding its revenue. Group 1001, the parent company of Delaware Life and Clear Spring, stated it is cooperating with investigators and maintaining that its financial condition and liquidity remain strong, with unchanged financial strength ratings. Probes by prosecutors and regulators can conclude without charges or enforcement actions.
