U.S. prosecutors and the Securities and Exchange Commission are investigating billionaire Mark Walter, owner of the Los Angeles Dodgers and Lakers, over allegations that approximately $16 billion in profits from loans were funneled into his insurance companies.
The probe, which is being conducted by the U.S. Attorney's Office in Manhattan and the SEC, was reportedly initiated after an employee of Walter's TWG Global conglomerate raised concerns about suspicious revenue booking practices. This employee is said to have acted as a whistleblower, providing information that prompted the federal investigation.
Investigators are working to determine if Walter or TWG Global engaged in fraudulent activities. The conglomerate's business model involves channeling loans for its clients through a third party before they appear on the balance sheets of its insurance companies.
TWG Global has denied any wrongdoing, with a spokesperson stating that Walter and the company have "always acted in good faith." The spokesperson added, "We are confident these matters will be resolved favorably."
The investigation was disclosed by Walter's insurers in regulatory filings in June. TWG Global is cooperating with authorities.
Walter, who has an estimated net worth of $7.3 billion according to Forbes, is a prominent figure in the sports world. After co-founding the investment firm Guggenheim Partners, he played a key role in acquiring several insurance companies and subsequently establishing TWG Global. The company's investments span various sectors including investment management, AI and technology, finance, corporate lending, and sports, media, and entertainment.
In addition to stakes in the Dodgers and Lakers, Walter's sports affiliations include ownership of the WNBA's Los Angeles Sparks and investments in the Billie Jean King Cup and the Formula 1 team. He has also been associated with Chelsea Football Club.
The inquiry into Walter's business practices occurs amid a broader regulatory focus on private lenders providing loans to businesses, a sector that has become a significant area of concern for traditional banks.