We Investigated Magic Johnson, Mark Walter... and Your Nest Egg

Pablo Torre Finds Out

Pablo Torre investigates the financial dealings of billionaire sports owner Mark Walter, uncovering allegations of self-dealing and undisclos

Key takeaways

• Insurance companies invest policyholders' money in high-risk assets, including sports franchises, often without full disclosure.
• Mark Walter's Guggenheim Partners is under federal investigation for allegedly misreporting billions in affiliate transactions involving insurance funds.

Main topics

• Mark Walter's financial empire and Guggenheim Partners
• Affiliate transactions in insurance investing

Notable quotes

"In the end, they're taking money from retail investors, and that's the money ultimately that's being invested and funneled into these loans. That's who gets screwed."

Conclusion

While no definitive proof of fraud has been established, the investigation into Mark Walter's financial

Transcript preview

Speaker 1 (0:00) Welcome to Pablo Torre Finds Out. I am Pablo Torre, and today we're going to find out what this sound is. In the end, they're taking money from retail investors, and that's the money ultimately that's being invested and funneled into these loans. That's who gets screwed. Right after this. Speaker 1 (0:25) I mean, this is a story you can just like never stop reporting. I know. That's the problem. Yes. Yeah. I mean, it's the problem of my summer vacation, which you helped ruin, Sam Koppelman. I waited like two days. I waited two days to bother you. But it's not every summer vacation when a multi-billionaire has their phone and laptop seized on their private jet. And then it comes out that that same billionaire is selling the Lakers a year. after buying the team. That felt like break glass in case of emergency. It's Pablo's music. Yeah, apologize to your daughter because the Lakers got sold for a record $12.5 billion to Josh Kuster and Bob Iger. And this week, the NBA handed out arguably the biggest punishment in pro sports history, while the SEC is also now probing Daktronics. And, oh yeah, Mark Walter is a guy that people should probably be aware of. Speaker 1 (1:20) Mark Walter's insurance companies are shuffling billions of dollars of investments as he faces an intense federal investigation into allegations of multi-billion dollar loan fraud. The Department of Justice and the SEC are investigating whether Walter illegally used money from insurance companies he controls to fund his massive sports investments without proper disclosure. When a billionaire sports owner is accused of self-dealing, I'm pretty sure you're going to pick up the phone. Yeah, the federal whistleblower, parallel investigations by the DOJ and the SEC, a couple grand jury subpoenas, and Violet, I'm sorry that I'm on the phone this much while we're on the beach. Mark Walter is a very successful financial services tycoon from the U.S. Speaker 1 (2:08) And he co-founded a financial services business called Guggenheim Partners. What has gone on to become an enormously successful fund-based asset manager. Huge amounts of assets under management. Los Angeles Dodgers, the Chelsea Football Club, Cadillac F1 team, and up until recently, the Los Angeles Lakers. I don't think people realize how crazy this story is. Like, there is a scenario in the multiverse where the guy that owns the Dodgers goes to jail. Like, it's crazy. The number of podcasts I've listened to where people properly pronounce finance. Finance. Finance. All of it feels way too complicated for sports fans at first to wrap their minds around because there's all this financial engineering and there's insurance stuff and bond documents. Most people aren't titillated by insurance bond documents, Pablo. I mean, look, I never assumed that my kink is others. Speaker 1 (3:05) But there is, I think, a simple idea at the core of this, which is that the public, and this is like the through line of our show, it turns out, the public does need the insanely, improbably, impossibly wealthy owners of sports teams to tell us the truth by law about what their money is really doing. Speaker 1 (3:31) Sports teams used to be owned by like the richest guy in a town. And they loved their team so much and they became successful or their parents were successful. And then they used that money to buy the team. But the thing is that sports teams have become this incredibly expensive asset. And so these owners have to go to incredible extremes to raise money to buy these teams. And that's how you end up with a Lakers sale at $12 billion. And the term people just need to understand here briefly is leverage. They are leveraging other assets to pay these insane prices, unprecedented prices. And leveraging, Sam, just means they're using the money that they have to borrow more of it. Right. And with Mark Walter, the big pool of money that he has access to is insurance money. Speaker 1 (4:22) The way this works is basically Americans buy life insurance policies. They come in two forms. One is if something tragic happens to you, you've paid into these insurance plans and money will be paid out to your family members who are left behind. The other way is while you're working, you can pay money into a life insurer, something called annuities, and you end up getting paid out annuities later in your life. So you're investing today for some kind of payout tomorrow. Speaker 1 (4:48) But the way insurance companies actually work is that they invest those upfront payments. That's their business. Your parents and your grandparents give them this money with the assurance that they will get something back in return as time goes on. This is the nest egg. Exactly. And historically, the insurance companies would invest in safe assets. They'd buy bonds or real estate. The kinds of things you could bet on to reliably over time go up. But the problem with those things, Pablo, is that they're boring. Speaker 1 (5:17) Way more boring than sports teams because they don't enable the owner of an insurance company to keep that much after they distribute to their policyholders. So insurance companies, they start buying more and more out there kind of stuff. Higher upside investments. Exactly. And a lot of this, to be clear, is legal. The thing is, there's one category of investment you're not allowed to make without proper disclosure. And that's if you're using insurance money to invest in another one of your own businesses. Like say I owned an insurance company and also a Szechuan fish stew soup dumpling restaurant. I couldn't use your parents' and grandparents' insurance payments to invest in my dream of succulent soup dumplings filled with Szechuan fish stew unless I disclosed that. Speaker 1 (6:07) very clearly, because people would then be able to understand the kinds of things their money is being used for. And that disclosure would be called an affiliate transaction, which is basically a deal with yourself. Yes, and to regulators, an undisclosed affiliate transaction, much like the purely hypothetical stew that you've been pitching us, can start to smell. It can smell, in fact, like self-dealing, and at a certain point... Allegedly, fraud. Allegedly. That is allegedly what seemed to have happened with Mark Walter and his firm, Guggenheim Partners. Right. But instead of the fish stew, he was investing your parents' and grandparents' nest egg in sports. And so this is where we got to say, for the record, that Mark Walter's personal holding company, TWG Global, TWG stands for the Walter Group, has denied any fraud allegations, saying last week that, quote, Speaker 1 (7:03) As it relates to Guggenheim, while the investigations originated with a whistleblower concern, TWG and Guggenheim have demonstrated there was no wrongdoing, that there is no victim here, that affiliated transactions are common across the insurance industry, and that they're not looking to sell their sports assets, including the Los Angeles Dodgers, at fire sale prices to raise capital for its insurance operations, end quote. Speaker 1 (7:29) You'll note that Walter's company did not deny there that it's selling the Lakers in order to raise capital for his insurance operations. But he did say pretty clearly that the Dodgers are not for sale. He's saying that we're not going to give this away at a discount. No, no, no. We're going to charge very high prices of anything. Unlike normal options where people say up front, hey, you're going to get a really good deal on this because I desperately need money. That's not what's happening here. No fire sale prices, period. Yeah, yeah. To be clear, we have not. Speaker 1 (7:57) proven fraud here. But what I can say is that our team at Hunterbrook Media, as well as the Wall Street Journal and the Financial Times and Bloomberg, a lot of financial journalists have been very deep in those titillating bond documents this summer. What it seems like happened is that Mark Walter and Guggenheim Partners severely underreported just how much money was mislabeled and never disclosed as an affiliate transaction. And that total, the total of affiliated transactions, has gone from what his insurers had estimated to be around $3 billion to now tens of billions of dollars. $20 billion, some people say, significantly more. And so this is the smell. Speaker 1 (8:40) that the feds have been investigating. And we should also disclose here for people who have not been following how you guys at Hunterbrook Media approach really complicated stories like this. Yes. So here's how Hunterbrook works. Hunterbrook Media, my team, is a team of incredible journalists and truth seekers of all kinds who go figure out what's happening in the world. Hunterbrook funds all of this reporting with an affiliate, Hunterbrook Capital, that supports our journalism. And sometimes, based on our reporting, the fund will take positions in the financial market. And right now, Hunterbrook Capital does have some positions related to this Guggenheim investigation, which you can see disclosed on our website, Hunterbrook.com. And I want to be clear that, in my personal opinion, what's so interesting about Mark Walter... Speaker 1 (9:22) is not just that there seemed to be all these affiliated transactions that he didn't disclose, but that actually a lot of these transactions seemed to have worked out. He bought sports teams at discounts, and as in the case of the Lakers, got some pretty crazy upside returns. Yeah, as an investor, the bet being sports will go up is what his earlier statement was fundamentally alluding to. And look, the thing that I did not appreciate about that... Speaker 1 (9:50) increase over time until I started reporting this story myself, is that the biggest reason for that increase, the biggest catalyst behind this century's boom in sports team valuations is arguably Mark Walter himself. He bought the Lakers at a then-record $10 billion valuation last fall. Before that, 2022, he bought a chunk of Chelsea in Premier League football at a then-record valuation of well over $3 billion alongside his partner, Todd Boley, who is also now looking to sell. But the very first time Guggenheim Partners bought the most expensive sports franchise ever, it was 15 years ago. It was 2012. It was Major League Baseball. And Mark Walter bought the Dodgers at $2.15 billion. And in fact, Sam, even the people who had heard of Mark Walter had no idea in 2012 how in the hell he was rich enough to buy the Dodgers in the first place. Speaker 1 (10:46) In your folder in front of you, you will find our pal Andrew Ross-Orkin writing in the New York Times dealbook section in 2012 this. A quick background check and some back-of-the-envelope math raises an obvious red flag. How on earth can this group of individuals afford to pay $2 billion in cash? The answer is that they probably can't, at least not by themselves. In addition to their own cash, Mr. Walter plans to use money from Guggenheim subsidiaries that are insurance companies, some state-regulated, to pay for a big chunk of his purchase of the Dodgers. But I think there's an even bigger reason that Mark Walter was able to dodge all sorts of scrutiny, especially from the world of sports, despite paying more than double, double the previous record for an American pro sports team, which was the Dolphins. And the reason... Speaker 1 (11:39) was somebody else on his team. It's a beautiful day to be out here in a ballpark that I've spent many days eating Dodger dogs and eating popcorn. watching the Dodgers win World Series and watching some of the greatest baseball players in history play for this great organization. I remember being at Sports Illustrated in 2012, Sam, and we did a cover shoot with Magic Johnson. He was on the cover of SI behind home plate at Dodger Stadium. And it will be unsurprising to anybody who's listened to this show, which has investigated Magic Johnson's Twitter account before. Pablo Torre finds out. They do everything from potential insurance fraud to an investigation of Magic Johnson's Twitter account. And then somehow, the two of them come together. Finally, they overlap in all of his tweets about the Dodgers, a couple of which also happen to be in the folder in front of you. Speaker 1 (12:37) On November 2nd, 2025, Magic tweeted a bunch of trophies. Yes. Let me count them. One, two, three, four, five, six, seven, eight. Sorry, do we know how many? Is it his total trophy count? I believe it is, in fact. His 18 trophies? Yeah, I mean, that's explained in the next tweet. Incidentally. Sorry. Which you have in front of you. Which says, 18 championship rings for me. NCAA championship with MSU. 11 Lakers. Five playing. Five as an owner and one as an executive. One LA Sparks. One LA FC. One Team Liquid. That's an esports team, not a convenient brand for the whole story we're talking about. And now, three with the Dodgers. Yeah, this was all after the Dodgers won that second straight World Series last November. But to the employees, the actual people inside of Guggenheim Partners, Sam, which is Mark Walter's investment and advisory financial services firm. Speaker 1 (13:26) It was always clear that the actual controlling owner of the Dodgers was, in fact, their boss, Mark Walter himself. In part, because the Dodgers were part of Walter's recruiting pitch for his company. As one former Guggenheim insider, an attorney who agreed to talk to me on the condition of anonymity due to the ongoing federal investigation, explained. In 2014, I was working in compliance at a... hedge fund and i got a call from the compliance officer who i worked with at a previous firm and she basically described her new role and mentioned that the job was pretty tough that the you know these people over there were a very different breed than what she's used to the people who she was responsible for working with were billionaires Speaker 1 (14:13) She was looking for somebody who had my kind of experience looking at things forensically. I was an auditor in my past, you know, with money laundering expertise, where you're diving in and you're trying to understand financial transactions and who's at the bottom of things. So that's how I got my start working at