Mark Walter's Delaware Life Insurance is set to reduce its investments in his businesses by as much as $6.5 billion, according to a statement from TWG Global, Walter's holding company. This move follows increased regulatory scrutiny over the billionaire's financial activities.
TWG Global announced that it has agreed to swap up to $6.5 billion of Delaware Life's related-party investments for an equivalent amount of assets classified as independent. The company stated that Group 1001 insurance companies' capital positions and liquidity remain strong.
Federal prosecutors and the Securities and Exchange Commission (SEC) are reportedly investigating Walter's business empire. The probes aim to determine if Walter or his businesses committed fraud by concealing financial connections while borrowing billions of dollars from insurers he controls. In February, Delaware Life and Clear Spring Life and Annuity received grand jury subpoenas from the U.S. Attorney's Office for the Southern District of New York. The SEC has also been conducting a parallel investigation.
Regulators are examining whether certain private credit investments, classified as independent by Delaware Life and Clear Spring Life, were in fact affiliated. Following the subpoenas, Delaware Life conducted an internal investigation and identified errors in the presentation of some related-party investments.
Last month, ratings agency S&P Global revised its outlook on Delaware Life to negative. This followed the firm restating its annual financial statements and reclassifying a significant volume of private credit investments as affiliated or related-party assets. A spokesperson for TWG Global stated that the Group 1001 insurance companies are working with the Delaware Department of Insurance to address the identified investments and are committed to resolving the matter.
Mark Walter, 66, is the owner of the Los Angeles Dodgers. Earlier in August, he agreed to sell the Los Angeles Lakers basketball team for $12.5 billion.