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Walter-controlled life insurers face subpoenas over related-party disclosures
The investigation follows a late reporting error that raised Delaware Life’s related-party investments to more than $17 billion, or at least 39% of invested assets, and prompted an internal review and rating outlook cut by S&P.
Two life insurance companies controlled by Mark Walter, Dodgers and Lakers owner, are under federal investigation over whether they properly disclosed billions of dollars in private credit investments tied to other parts of his business empire, according to Bloomberg News, as cited by Insurance Business.
Insurance Business reported that Delaware Life Insurance Co. and Clear Spring Life and Annuity Co., units of Group 1001, received grand jury subpoenas in February, after disclosing details in June 26 regulatory filings. Manhattan prosecutors are examining whether the insurers failed to disclose that their private credit holdings backed Walter-controlled ventures, in a probe running in parallel with the US Securities and Exchange Commission.
The subpoenas followed an earlier prosecutorial inquiry opened last year involving Guggenheim Partners’ $362 billion asset management arm, where Walter serves as chief executive, Insurance Business said. The FBI executed at least one search warrant in September to seize a mobile phone, though it was not clear which part of the investigation the device relates to.
Insurance Business added that the subpoenas prompted Delaware Life and Clear Spring to conduct internal reviews, which found errors in prior financial reporting. Delaware Life previously said roughly 3% of investments, about $1.4 billion, involved related parties, but the corrected figure was more than $17 billion, or at least 39% of total invested assets as of the most recent year-end, leading the company to pursue a remediation plan to reduce affiliated exposure and strengthen controls, while S&P Global Ratings revised the insurer’s outlook from stable to negative and affirmed its A- financial strength rating.