TWG Global on Wednesday vigorously denied a wave of fraud allegations,
insisting there was "no fraud" and no injuries, even as federal prosecutors, the SEC, and state insurance regulators intensify their scrutiny of Mark Walter's financial empire.
The statement, released on August 26, came eight days after Reuters reported that Delaware Life Insurance Co., one of Walter's Group 1001 insurers, agreed on August 18 to swap up to $6.5 billion in related investments for an equivalent amount of unrelated assets under regulatory pressure. S&P Global revised its outlook on Delaware Life to negative after the company restated its annual financial statements and reclassified a significant amount of its private credit investments as affiliated or related assets, Reuters reports.
The crux of the regulatory dispute centers on whether private credit investments held by Delaware Life and Clear Spring Life were improperly classified as unrelated entities when, in fact, they were related-party assets. According to The Wall Street Journal, US federal prosecutors and the SEC are investigating whether Walter or his companies committed fraud by concealing financial ties while borrowing billions of dollars from insurers he controlled. According to Reuters, Delaware Life and Clear Spring Life received subpoenas in February from the US Attorney's Office for the Southern District of New York as part of a grand jury investigation.
In a statement on Wednesday, TWG directly commented on these investigations, asserting that Guggenheim's auditor has issued unqualified audit opinions for 2024 and 2025, including regarding specific revenues under review. These audit reports have not been independently verified as publicly filed or submitted to regulators, and this assertion is based solely on TWG's own press release. "No fraud occurred," the company stated. "While the investigations were initiated by a whistleblower, TWG and Guggenheim have proven no wrongdoing." TWG also added that it intends to cooperate with the Department of Justice and the SEC to resolve their inquiries.
Regarding its insurance operations, TWG characterized the $6.5 billion asset swap as a planned regulatory adjustment, not a crisis-relief measure. Notably, TWG's own plan calls for the direct purchase of affiliated assets onto the balance sheet of the holding company—a structure that significantly increases the holding company's leverage and liquidity risks. The company stated that affiliated transactions are common in the insurance industry, are generally permitted subject to regulatory requirements, and that no policyholders suffered losses. "Group 1001's insurance companies are working with the Delaware Department of Insurance to resolve the identified investments, and TWG intends to resolve this matter to the Department's satisfaction," a company spokesperson said. The Delaware Department of Insurance is currently evaluating Group 1001's plan.
The company also refuted the narrative surrounding its sports portfolio. TWG reported that the proposed sale of the Los Angeles Lakers to Josh Kushner and Bob Iger for $12.5 billion represents a 25% premium to the price Walter paid less than a year ago, and an even more significant premium to the $5.0 billion valuation upon his entry into the franchise in 2021. The company stated that Kushner's team approached Walter, not the other way around, refuting suggestions that the sale is a forced liquidation of assets. The Los Angeles Dodgers are not for sale, TWG stated, and team president Stan Kasten has publicly reiterated this position. TWG also said it has no intention of divesting its stake in the Cadillac Formula 1 team.