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The owner of the Los Angeles Dodgers and the Los Angeles Lakers has a problem that has nothing to do with baseball or basketball.
U.S. prosecutors in Manhattan are investigating potential financial improprieties at two insurance companies controlled by Mark Walter and at Guggenheim Partners, where he is chief executive officer, Bloomberg reported Monday afternoon, citing people with knowledge of the matter and regulatory filings. The Securities and Exchange Commission is running a parallel investigation.
No one has been charged. Walter has not been accused of wrongdoing, and probes like this can end without charges or enforcement actions. His holding company, TWG Global, said in a statement it is “aware of and cooperating with the investigation.”
But the investigation goes to the heart of how Walter built the fortune that bought the Dodgers, the Lakers and the WNBA’s Sparks, financed the entire PWHL and pieces of Chelsea FC and the Cadillac Formula 1 team.
What are the feds investigating?
Two companies sit at the center of the investigation: Delaware Life Insurance Co. and Clear Spring Life and Annuity Co. Together they manage about $85 million, much of it money that regular people paid into for retirement annuities and life insurance. Insurance companies invest that money to make sure they can pay customers down the road, and Walter’s insurers put billions of it into private loans, the kind made directly to businesses rather than bought on a public market.
The question prosecutors are asking is whether those loans were quietly connected to Walter’s own companies, and did the insurer hide it?
That distinction matters because regulators watch closely when an owner invests customers’ money in their own ventures. If the businesses stumble, the customers’ safety net stumbles with them. Both insurers received grand jury subpoenas in February, according to the filings cited by Bloomberg.
The subpoenas sent the insurers digging through their own books, and what they found, later described as errors, changed the picture entirely. Delaware Life had told regulators that only about 3% of its investments, roughly $1.4 billion, involved companies connected to Walter. The real number was at least 39%, more than $17 billion, according to the report. Basically, the company’s money was about 12 times more tangled up with its owner’s other business than anyone had been told.
Delaware Life is now working on a plan to unwind those connections and tighten its bookkeeping. S&P Global Ratings, one of the agencies that grades how financially sound companies are, responded by shifting its view of Delaware Life from steady to shaky, though it stopped short of downgrading the company’s overall A- grade, which still signals a strong ability to pay customers.
The FBI also executed at least one search warrant in September to seize a mobile phone, Bloomberg reported, though it could not be determined which part of the investigation the seizure involved. Prosecutors had also previously looked at whether Guggenheim was straight with outsiders about how much money it was making.
Group 1001, the parent of both insurers, said it is cooperating and that “our capital position and liquidity remain strong.”
How does this affect the Dodgers, Lakers, Sparks and PWHL?
None of this touches the teams, yet. The timing is awkward for the NBA, though. The league’s Board of Governors unanimously approved Walter’s record $10 billion purchase of the Lakers last fall. The subpoenas had landed earlier, in February, and stayed out of the public view until now.
And it’s worth noting that Walter’s spending turned the Dodgers into the sport’s standard, and he has started remaking the Lakers the same way. That model runs on the capital now sitting under a federal microscope.
If charges ever reach Walter personally, MLB and the NBA would have decisions to make. Historically, however, cases like this rarely make it to the courtroom.
Walter also owns the entire PWHL, the 12-team professional women’s hockey league he launched with Billie Jean King in 2023. The championship trophy is named after him.
USA TODAY Sports has reached out to the Los Angeles Dodgers for comment and will update this story with any updates.
Clinton Mora is a reporter for Trending Insurance News. He has previously worked for the Forbes. As a contributor to Trending Insurance News, Clinton covers emerging a wide range of property and casualty insurance related stories.