Two major banks, Truist Financial Corp. and Fifth Third Bancorp, have paused the sale of products from Mark Walter’s Delaware Life amidst federal probes. The investigations by the U.S. Attorney’s Office in Manhattan and the SEC center on how the insurer’s parent company, TWG Global, reported approximately $20 billion in assets affiliated with other entities controlled by the Los Angeles Dodgers owner. Despite TWG Global’s denial of fraud, the scrutiny has intensified, highlighted by a significant revision in Delaware Life’s affiliated asset disclosures from 3% to 42%.
In a significant development on Wall Street, two prominent financial institutions, Truist Financial Corp. and Fifth Third Bancorp, have temporarily suspended the sale of products from Mark Walter's Delaware Life. This decision comes amidst growing concerns over federal investigations into how the insurer's parent company, TWG Global, reported approximately $20 billion in assets linked to other entities controlled by the billionaire Los Angeles Dodgers owner.
The suspension by these banks was revealed Friday, just two days after TWG Global, Walter's holding company, released a statement vehemently denying any wrongdoing, asserting that "there has been no fraud" at Delaware Life and its affiliate, Clear Spring Life and Annuity.
Mark Walter, CEO of Guggenheim Partners, primary owner and chairman of Major League Baseball's Los Angeles Dodgers, and a 12.7% stakeholder in BlueCo (controlling Premier League club Chelsea), seen on the field after the FIFA Club World Cup Final. (Photo by Rich Graessle/Icon Sportswire via Getty Images)
CNBC has confirmed the pause, which was initially reported by Bloomberg. Sources familiar with the situation, speaking anonymously, indicated that Delaware Life is actively engaging with both Truist, a long-standing partner, and Fifth Third, with whom business commenced in April, to support existing contracts and discuss industry trends. The insurer is also providing updates on its efforts to reduce its exposure to affiliated-party assets. A spokesperson for Delaware Life stated that "communications with key distribution partners remain open and cooperative," while Truist and Fifth Third declined to comment.
The U.S. Attorney's Office in Manhattan and the Securities and Exchange Commission (SEC) are actively investigating both Delaware Life and Clear Spring, according to a regulatory filing by Delaware Life. This scrutiny follows reports from last September, where FBI agents reportedly seized Walter's phone and computer under a warrant as part of a broader probe into his business dealings.
Further intensifying the investigation, both Delaware Life and Clear Spring received grand jury subpoenas in February. Following these subpoenas, a review of Delaware Life's affiliated- and related-party disclosures led to a significant revision: the share of its total invested assets classified as affiliated with other Walter companies jumped from a reported 3% to a staggering 42%.
The federal probes have gained widespread attention, particularly after Mark Walter agreed to sell his majority stake in the Los Angeles Lakers earlier this month, less than a year after acquiring the team.
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