A sprawling federal investigation into billionaire sports mogul Mark Walter, owner of the Los Angeles Lakers and Dodgers, reportedly began after an employee acted as a whistleblower. The probe is examining allegations that billions of dollars in profits were funneled to Walter-owned insurance companies.
According to reports, U.S. prosecutors and the Securities and Exchange Commission (SEC) are investigating Walter's conglomerate, TWG Global, for potential fraud. The investigation centers on approximately $16 billion in loans that allegedly ended up in the accounts of Walter-owned insurance firms, passing through a third entity. TWG Global has stated that these transactions were not different from usual practices and that the company has always acted in good faith. A spokesperson for TWG Global told The Wall Street Journal that the company is cooperating with authorities and is confident the matters will be resolved favorably.
The whistleblower's complaint has prompted an expanded inquiry into TWG Global's investments in the private credit lending industry. This industry played a role in Walter's acquisition of the Dodgers, where he serves as CEO of investment firm Guggenheim Partners. Walter's insurance firm, Delaware Life, has acknowledged in recent filings that "errors were identified related to the identification and presentation of certain related-party investments." Such transactions are required by law to be disclosed to insurance regulators.
Guggenheim has been aware of the investigation since at least September, and the FBI has conducted at least one seizure in connection with the probe. Delaware Life and Clear Spring, entities owned by Group 1001, a part of TWG, were subpoenaed in June. Group 1001 has stated it is undertaking "remediation plans... to reduce and restructure certain of the investments at issue."
Walter, estimated to be worth $7.3 billion, has become a significant figure in the sports world. Beyond his ownership of the Lakers and Dodgers, he is co-owner of Chelsea Football Club and owns the WNBA's LA Sparks. He is also a primary financial backer of the Professional Women's Hockey League and has investments in tennis and Formula 1.
He led the group that purchased the Dodgers out of bankruptcy a decade ago, and under his ownership, the team has become a dominant force in baseball. In 2022, Walter was part of the consortium that acquired Chelsea. He became the majority owner of the Lakers in a deal reported to be worth $10 billion.