Mark Walter’s Company Says There’s No Fraud, No Victim, and No Fire Sale

Mark Walter’s TWG Global came out firing Wednesday, saying it has committed no fraud, rejecting the idea that Walter’s Lakers exit was part of a “fire sale” to raise money amid federal investigations, and insisting the Dodgers are not for sale.

The press release marks the most substantial public statement since news broke that Walter’s companies are under parallel investigations by the U.S. Securities and Exchange Commission and federal prosecutors in the Southern District of New York.

“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,” the statement says. “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.”

Investigators are looking into at least two of Walter’s companies: Delaware Life and Clear Spring Life & Annuity. The probes center around inaccurate disclosures by the life insurers tied to what are known as “affiliated investments;” the amount originally disclosed was billions of dollars lower than what the company has since reported in restated disclosures. 

TWG’s statement says “there has been no fraud” and notes “there is no victim here. No one has been harmed, and no one has claimed they were harmed.” It also says TWG is “committed to working with” the DOJ and SEC to “resolve their inquiries,” and that it has “presented a plan to address any regulatory concerns.” A representative for the SEC declined to comment, and representatives for the DOJ and SDNY did not immediately respond to requests for comment.

The idea that no one was harmed will not necessarily get Walter out of hot water, according to former DOJ trial attorney Michael Weinstein, who now works at law firm Cole Schotz. However, showing prosecutors that his companies have enough cash to restore the assets under investigation can give his attorneys a card to try and play to lessen any potential punishment.

Weinstein compares it to someone who robs a bank and then returns the money. That person can “still be criminally prosecuted for robbing the bank,” he says.

“He could be prosecuted if he intentionally misled investors, the insurance commissioner, or regulators, or committed some type of fraud,” he tells FOS. “That wouldn’t be wiped out by virtue of him having all the money now.”

The issues at hand mirror claims made in a 2014 lawsuit—that money one of the plaintiffs paid into her life insurance policy was used to fund a $35 million loan that was connected to the purchase of the Dodgers. Although that suit was dropped one day after it was filed, the forensic accountant who helped build the case recently told Front Office Sports “my clients seemed pleased, that’s all I can say.”

Weinstein tells FOS the 2014 suit is something prosecutors will likely take into account as they investigate.

“Prosecutors look for patterns,” he says. “They look to see whether or not the accused individuals or companies have been doing this same type of thing for many years. They want to discern whether or not the most recent activity was inadvertent, or if there were law changes that caused them to conclude they could do it this way.”

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