Mark Walter’s holding company vehemently ‘sets record straight’ on fraud allegations, Dodgers sale

As reports and rumors continue to swirl around Dodgers owner Mark Walter amid his shocking sale of the Lakers this month and an ongoing federal investigation into potential improprieties in his business empire, the billionaire’s holding company released a defiant statement on Wednesday defending its business practices, denying any wrongdoing and reiterating that the Dodgers are not for sale.

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“Over the past several weeks, multipronged attacks against TWG have been advanced by unnamed sources with self-serving interests that have been reported in the media,” began the lengthy statement from TWG Global, the Walter-founded holding company of which many of his businesses, including his Guggenheim Partners investment firm, is a subsidary.

“It is important to set the record straight. TWG stands firmly behind the integrity of its business and remains focused on continuing to deliver value to its stakeholders.”

The statement, which was reported by BusinessWire, also added: “Despite what has been reported, there has been no fraud.”

Speculation over Walter began earlier this summer, when reports from Bloomberg and the Wall Street Journal revealed a federal investigation was being conducted by the U.S. Attorney’s Office for the Southern District of New York and the Securities and Exchange Commission into several insurance companies within his business portfolio.

The probe, which was reportedly triggered by a whistleblower complaint, focused on loans given by those companies to other Walter-owned businesses, and whether they were properly disclosed to investors as so-called “affiliated” transactions.

The Delaware Life Insurance Co. and Clear Spring Life and Annuity Co. both reportedly received grand jury subpoenas, while Walter had his cell phone and computer reportedly seized by FBI agents carrying out a search warrant aboard his private plane in Chicago.

The story then exploded earlier this month when Walter stunningly sold the Lakers in a sudden $12.5 billion transaction, despite having owned the iconic NBA franchise for less than a year.

That, coupled with other reports about Walter’s plan to sell his stake in Chelsea Football Club, his efforts to raise capital by potentially pledging his Guggenheim ownership stake, and his apparent efforts to renegotiate the Dodgers’ and Lakers’ TV deals for a lump-sum payment, all were taken as signs publicly that the 66-year-old businessman was under duress –– and that a potential sale of the Dodgers could be next.

However, TWG’s statement on Wednesday pushed back on that narrative, reiterating “there was no wrongdoing” within Walter’s companies and that “TWG is not looking to sell its sports assets at ‘fire sale’ prices to raise capital for its insurance operations.”

Regarding the Dodgers, specifically, TWG said: “To be clear, the team is not being sold and no sale process has been initiated.”

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As for the Lakers’ pending sale, the statement cited the 25% appreciation of the franchise since Walter’s $10 billion purchase last year as evidence it was “hardly a ‘fire sale.’”

“Mr. Walter and his partners continuously get interest from prospective buyers and co-investors in their sports assets and, as responsible owners and investors, they consider all legitimate offers when they are received,” the statement said.

In recent weeks, there has also been renewed attention paid to how Walter initially acquired the Dodgers through his Guggenheim Baseball Partners group for $2.5 billion back in 2012 –– with questions raised about potentially improper funding methods between companies he owned at the time.

However, TWG’s statement was also declarative on that point. 

“The allegation that the Los Angeles Dodgers were acquired or have been funded improperly is false and not supported by the facts,” the company said, noting how the deal was subject to scrutiny from Major League Baseball as well as “a full investigation conducted by an outside law firm on behalf of insurance regulators from multiple states, which identified no irregularities and resulted in no further action, effectively resolving the matter.”

TWG also noted that the “Dodgers have the highest revenue in baseball, and it significantly exceeds the team’s obligations to its players.”

While it’s still unclear how the federal investigation into Walter’s business will play out, TWG said it is cooperating and “committed to working with” investigators to “resolve their inquiries,” and that a “straightforward plan to reduce affiliate exposure on the books of the insurance companies in an orderly, measured manner” has been submitted to regulators.

That plan includes a proposal from TWG to purchase the “affiliated assets” that have come under question amid the investigation from the insurance companies being probed.

“Affiliated transactions are common across the insurance industry, and suggestions that TWG is ‘looting’ insurers is defamatory and false,” the statement said.

“There is no victim here,” it added. “No one has been harmed, and no one has claimed they were harmed.”

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