Key facts
- Guggenheim Strategic Opportunities Fund shares reached their lowest point since March 2009.
- The Bear Cave newsletter alleged the fund uses premium share sales to fund distributions.
- The fund's net asset value was $10.32 per share, with shares trading at an 8.7% discount.
- U.S. federal prosecutors and the SEC are investigating Guggenheim Partners CEO Mark Walter for alleged fraud.
- Walter's holding company, TWG Global, agreed to swap related-party investments.
Shares of the Guggenheim Strategic Opportunities Fund (the Fund) reached their lowest point in over 17 years on Friday, following sharp declines on Thursday after allegations from a short-seller. The Fund's shares were last down 3.7% at $9.07, their lowest since March 2009.
The Bear Cave, a newsletter owned by Hunterbrook Media, alleged in a Substack post that the Fund has been paying distributions to shareholders by selling new shares at a premium to its net asset value (NAV). The newsletter questioned the sustainability of these payments.
At Thursday's close, the Fund was trading at an 8.7% discount to its NAV, which stood at $10.32. The Fund's primary holdings include mortgage-backed securities and other fixed income assets.
Separately, media reports indicated that U.S. federal prosecutors and the Securities and Exchange Commission (SEC) are investigating Guggenheim Partners CEO Mark Walter's business empire. The probe aims to determine if Walter or his businesses committed fraud by concealing financial connections while borrowing billions of dollars from insurers he controls. In response, TWG Global, Walter's holding company, announced an agreement to swap up to $6.5 billion of related-party investments from Delaware Life, an insurer controlled by Walter, for an equivalent amount of independently classified assets.