Trying to understand the ongoing financial morass that is the Mark Walter Investigations story is a bit like trying to untangle the Gordian Knot, the literal knot of antiquity whose legend prophesied that whoever untangled it would rule all of Asia.
Alexander the Great literally cut the knot with his sword, demonstrating lateral thinking, and the story is instructive on how to present information on this subject without boring everyone.
In our initial entry into this story, we gave more of an overview
of the investigations with an explanation of why they mattered. To begin this essay, we should explain the federal investigations of Mark Walter in more granular detail.
The Wall Street Journal details Mark Walter’s financial empire
From Justin Baer, Margot Patrick, Joe Wallace, and Andrew Beaton on August 17 at The Wall Street Journal:
The current probe burst into public view after June filings by Delaware Life and Clear Spring revealed the companies had been subpoenaed by federal authorities.
Authorities have zeroed in on ABS Capital, as well as Amistad Financial, Bradford Allen and Hudson Trading, the Journal reported. Proceeds from the loans made by the insurers passed through entities purportedly controlled by each of these firms and went to other Walter-linked businesses.
Amistad, chaired by former McDonald’s CEO Don Thompson, is connected to Walter’s empire through its purchase of life-insurer EquiTrust from Magic Johnson Enterprises. Johnson’s company had earlier acquired the insurer from Guggenheim and others.
Entities controlled by Amistad, including Amistad Merchant Funding, Amistad STF II and Amistad Debt Warehouse 1, were among the recipients of loans from Walter’s insurers Delaware Life and Clear Spring, according to their recent filings.
Earlier this year, EquiTrust lent $500 million to 10 companies, with names including Harborcrest, Alder Ridge and Cedarpoint, the insurance filings show. Those companies were established by Federico Hermida, a principal at ABS, according to corporate filings.
Amistad executives didn’t respond to requests for comment, and EquiTrust’s chief lawyer said EquiTrust is aware of reports of a federal inquiry involving TWG and it is monitoring the situation closely.
Another firm that investigators are probing, Bradford Allen, is a commercial real-estate broker founded by Jeffrey Bernstein and Laurence Elbaum that has worked on a series of Walter deals, including the renewal of Guggenheim’s lease on its Midtown Manhattan offices and the development of a headquarters in Indiana for the F1 racing team Walter backs. Bernstein formerly was on the board at EquiTrust.
[Emphasis added.]
Thankfully, the WSJ provided a handy chart to illustrate both the general state of Mark Walter’s businesses and the general scope of the investigations. The undisclosed connections are of particular importance for later.
As previously reported here and elsewhere, one of the focuses of the investigations is the previously undisclosed connection between limited liability companies acting as intermediaries and Walter-related/owned businesses.
The recent government scrutiny of deals by Walter’s insurance companies seemed to come by chance. It began with a whistleblower inside Guggenheim Investments, the firm’s asset management arm, about possible accounting fraud in a Middle East financing deal.
In April 2025, Walter’s conglomerate, TWG Global, announced that Mubadala, the Abu Dhabi fund, would help it raise $10 billion in fresh equity. Based on the whistleblower’s account, authorities began to explore whether Guggenheim Investments, partly owned by TWG, might have used misleading contracts to inflate its revenue and secure a better deal.
A spokesman for Guggenheim Investments said the firm received a whistleblower report in the spring of 2025 about the accounting of “certain advisory contracts” of Guggenheim Private Investments, an investment adviser. The firm shared the report with its independent auditor, which issued “unqualified audit opinions” giving the company’s 2024 and 2025 financials a clean bill of health, he said.
Payments related to the contracts led federal investigators to ABS, Amistad, Bradford Allen and Hudson Trading, said people familiar with the matter. Authorities later discovered the connection between the four firms and entities that passed loans from the Walter-controlled insurers to his other investments, according to people familiar with the matter.
Walter’s insurers have crafted plans to move a big chunk of affiliated loans off their balance sheets by the end of the year. The misclassification of such loans could spark lawsuits by policyholders, analysts said, or draw civil corrective orders from regulators. Delaware’s insurance department hasn’t commented. Ratings firms have said the companies could be downgraded if they don’t meet their remediation plans.
[Emphasis added.]
Failure to disclose
This story ultimately shines a light on private credit by the fact that Mark Walter failed to disclose that he was really on different sides of the same transaction (related parties) in financial dealings.
These disclosure requirements are important because, in the absolute worst-case scenario, if someone is abusing these requirements by hiding conflicts of interest, one can essentially trick investors by making a company appear to be more profitable than it actually is.
While not an insurance company, the most famous recent example of a company doing this behavior is Enron. It was a Texas energy company that ultimately bilked a lot of people out of a lot of money by both manipulating energy markets and cooking its own books to make the company look like it was much more profitable than it actually was.
Insurance companies have rules about what they can invest in and how much because of the fact that unlike other investment vehicles, when you have people paying premiums, they expect a guaranteed payout in the future, because we are all mortal.
Delaware Life, one of the insurance companies that Mark Walter owns, had to revise its own disclosures that it had way more related party assets than previously known and allowed. For those that need a visual breakdown, please refer to the Instagram infographic below.
Once again, per Justin Baer, Margot Patrick, Joe Wallace, and Andrew Beaton of The Wall Street Journal:
Regulators allow lending to so-called affiliate entities—those with ties to the insurer’s owner—as long as the loans are disclosed and don’t exceed certain limits. In Walter’s case, questions from federal authorities spurred an internal review at the insurers that found about $20 billion worth of such deals weren’t disclosed to regulators in Delaware, where Walter’s two primary insurers are based.
Walter is now racing to sell or unwind many of those undisclosed loans to head off ratings downgrades that would scare off policy buyers…
[Emphasis added.]
This plan to get these loans off the balance sheets is critical to understanding both the scope of the problem, the potential legal exposure Mark Walter faces, and explaining why the Los Angeles Lakers and his interest in the Chelsea football club were sold.
The story is insurance and self-dealing, not player deferrals
Let us first address what this story is not.
Some of the more unhinged takes regarding the Walter Investigations speculate that the Dodgers will soon declare bankruptcy, or that somehow this “scandal” is the greatest scandal in baseball history, which goes to show that the most unhinged takes often take up far too much media oxygen.
Staff Writer Bryan Murphy of McCovey Chronicles unleashed this corker of an example of “agita masking as journalism” before the Dodgers swept the Giants at home in mid-September 2026:
There’s a decent chance that your life insurance premiums have helped pay for Shohei Ohtani’s contract with the Los Angeles Dodgers.
…So, yes, everything is true. Families were denied life insurance claims while they paid for Blake Snell’s bogus rehab stints. Shohei Ohtani will be collecting your parents and grandparents’ premium dollars and down the ripping off taxpayers. The Dodgers are the devil and if this century has proved anything, it’s that evil always wins.
But make no mistake, the Dodgers will probably win this series because the Giants stink by comparison. Sure, there has been some excitement with some flashes of upside from younger players and Los Angeles is looking very old these days — but, come on. The Dodgers have been better than the Giants for a while now. Even if this scandal takes them down, the only thing that does is give Giants fans a momentary thrill…
The rivalry has never been more dead and over, but it’s never been a better time to hate the Los Angeles Dodgers, because you cannot hate them enough. They lied, cheated, and stole their way to championships, which on the one hand is great, but on the other hand might put a lot of insurance purchases in a bad situation.
[Emphasis added.]
As an aside, the Giants lost their next six games against the Dodgers after the cited post was published. Was it causative? Probably not. Is it a funny coincidence? Absolutely.
First off, unless you have a life insurance policy with Delaware Life or Clear Springs, your money has nothing to do with this story. Second, the reporting on the Mark Walter investigations clearly demonstrates that any alleged malfeasance has nothing to do with the Dodgers’ use of player salary deferrals. Third, no one is yet credibly alleging that the Dodgers themselves have done anything wrong.
Based on what we publicly know now, trying to turn the Dodgers into the 2017 Houston Astros is both lazy and an extreme stretch.
In a universe where the Black Sox still threw a World Series, Pete Rose still gambled, admitted to it, and was banned for life until a corrupt administration had to bully a Commissioner with the backbone of a chocolate eclair into reversing that ban, or where trash can jokes in Houston are still both hilarious to out-of-towners and infuriating to locals, the Dodgers’ use of deferrals in contracts is still both legal and financially sound.
Yes, the team owes over a billion American dollars to eight players over the period of 2028 to 2046, but anyone who thinks that the Dodgers organization has done anything wrong or that the Major League Baseball Players Association would be silent if it were is either just manifesting failure where none exists or seething with an envy that makes one recognize the value of cognitive therapy.
Melody Gutierrez and Brittney Ghiroli of The Athletic provide the following summary of the Dodgers’ deferrals:
The Dodgers usage of deferrals is unprecedented in the sport. They owe more than $1 billion to eight players in payments scheduled to be made from 2028 to ’46. Per baseball’s CBA rules, deferred payments are put into an account roughly two years after they’re agreed upon, which is eight years before they’re due to be paid out. The players union receives updates on those accounts every three months, and there have not been any issues to date with the Dodgers funding those deferrals.
To use Ohtani’s contract as an example, he and the Dodgers agreed to a 10-year deal worth $700 million, $680 million of which would be dispersed in deferred payments from 2034-43. So the $68 million deferred payment owed to Ohtani for the 2024 season, his first with the club, was required to be in a trackable account this summer, to be collected in 2034.
The Dodgers’ deferred payments are in one account, according to industry sources, and while it’s plausible they are in an insurance fund, MLB has rules governing how liquid those accounts must be. Per the CBA: “the amount(s) funded are maintained in the form of unencumbered assets comprising cash or cash equivalents and/or registered and unrestricted readily marketable securities, unless a Club obtains the Parties’ prior written authorization of an alternative form.”
The Dodgers did not request an alternative form for the deferrals in the case of Ohtani or any other current player, people briefed on the details but not authorized to speak publicly about them, told The Athletic.
[Emphasis added.]
Stepping back, the arrangement makes sense. Having the funds in a form that can both be readily accessed and/or transferred when the time comes to pay out makes sense, unless the parties agree in writing ahead of time, largely prevents any sort of financial chicanery. Putting the money elsewhere (think shares of a private corporation or a security that isn’t readily marketable) just creates unnecessary hurdles when it’s finally time to pay up.
Player: It’s 2028, it’s time to pay me! Gimme.
Team: We put your money into shares of this private company. We have to find a buyer. Oops.
The above hypothetical is a gross oversimplification, but the idea is generally there. The deferral issue (really a perception issue) is distinct from the insurance issue. The insurance issue is largely a Mark Walter problem, as the Dodgers organization is tangentially involved.
