I said that I would keep you updated on the Mark Walter investigation as I learned more, but even I didn’t think new details would come this fast. As it turns out, it’s starting to look like there is more than just smoke to this investigation.
What we uncovered yesterday was the basic structure of the allegations: Walter owns a $350 billion asset management firm (Guggenheim) and multiple insurance companies (Delaware Life & Clear Spring Life) → those insurance companies invest customer premiums with his asset management firm (fine) → but in addition to buying stocks, bonds, etc., those insurance companies also make loans to Walter-affiliated businesses (potentially fine) → and while Walter initially told regulators that just $1.4 billion of the insurance companies total portfolio was loaned to companies he controlled, the real number was ~$20 billion, meaning 40 cents of every dollar that customers invested in annuity products was quietly being loaned out to companies controlled by Walter behind the scenes (not fine).
The most generous view is that Walter simply kept bad records. He invested more money in private credit transactions with related parties than he initially said and then revised the numbers upward once the investigation pointed out his error.
But what if that’s not the truth? What if Walter not only knew what he was doing but actively tried to conceal it from the public and his investors so that he could buy multi-billion-dollar sports teams and increase his public profile? That could be criminal, and new evidence indicates that might be exactly what he was doing.
Read more
