Dodgers and Lakers owner Mark Walter's financial empire is under federal scrutiny, with prosecutors and securities regulators investigating $16 billion in reportedly undisclosed loans from his insurance companies to his own affiliated businesses. This investigation follows revelations that two of Walter's Delaware life insurers drastically revised their reported related-party exposure from $1 billion to $16 billion, triggering grand jury subpoenas and a negative outlook from S&P Global.
Walter, who is the chief executive of Guggenheim Partners, led the group that purchased the Dodgers for $2.15 billion in 2012, with more than $1 billion coming from insurance companies managed by Guggenheim. Last year, Walter and TWG Global also acquired a controlling stake in the Lakers at a $10 billion valuation. The probe focuses on allegations that his insurance companies made investments in other parts of his business empire without properly labeling them as affiliated, effectively amounting to self-dealing and potentially tax fraud.
Following an internal investigation, Delaware Life stated it would restructure some related-party loans and address internal control deficiencies. While Fitch Ratings maintains an "A-" financial strength rating for Delaware Life, it lowered the outlook to "negative" due to the higher credit risk associated with the changed portfolio. The insurer plans to sell $6.5 billion in assets tied to Walter's affiliated companies to another Walter-controlled company, TWG Global.
