Federal Probe Expands to Insurers Controlled by Mark Walter

Federal investigators are examining billionaire Mark Walter's financial empire, including Guggenheim Partners and two life insurance companies under his control, ZeroHedge reported citing Bloomberg. The probe, which began last year, initially centered on Guggenheim's $362 billion asset management business before expanding to Delaware Life Insurance Co. and Clear Spring Life and Annuity Co.

Both insurers received grand jury subpoenas in February. Prosecutors are reviewing whether the companies properly disclosed private credit investments connected to affiliated businesses in Walter's network. The Justice Department investigation runs parallel to a separate SEC probe.

The FBI seized at least one mobile phone under a search warrant last September. After the subpoenas, the insurers conducted an internal review that identified financial reporting errors. Delaware Life revised its disclosures to reveal roughly $16 billion in additional affiliated private credit investments.

Related-party holdings at Delaware Life rose to at least $17 billion, or about 39 percent of invested assets, from the previously reported $1.4 billion, or 3 percent. S&P Global Ratings changed Delaware Life's outlook from stable to negative while keeping its A- financial strength rating unchanged. "TWG is aware of and cooperating with the investigation," the company said.

ZeroHedge reported that Walter has historically supported Democratic candidates and causes through campaign contributions, including to the Democratic National Committee and Barack Obama's 2011 reelection campaign.