Guggenheim fund hits 17-year low after short-seller claims

Shares of close-ended Guggenheim Strategic Opportunities Fund hit their lowest level in over 17 years on Friday, a day after dropping sharply following allegations from a short-seller.

Its shares GOF.N were last down 3.7% at $9.07, their lowest since March 2009, a day after plunging over 6% on record volume.

Earlier this week, media reports said that U.S. federal prosecutors and the SEC are probing Guggenheim Partners CEO Mark Walter's business empire to determine whether Walter or his businesses committed fraud by concealing financial connections while borrowing billions of dollars from insurers he controls.

TWG Global, Walter's holding company, said on Tuesday it had agreed to swap up to $6.5 billion of Walter's insurance company Delaware Life's related-party investments for an equivalent amount of assets classified as independent.

• In a Substack post on Thursday, The Bear Cave, a newsletter focused on short-selling owned by Hunterbrook Media, alleged the fund has been paying distributions to shareholders by selling new shares at a premium to its net asset value, and questioned how the payments could continue in the future.
• The fund — whose biggest holdings include mortgage-backed securities and other fixed income assets — was trading at an 8.7% discount to NAV at Thursday's close, according to Guggenheim's website. The NAV last stood at $10.32.
• Guggenheim Partners and Hunterbrook did not immediately respond to a Reuters request for comment.
• Hunterbrook Media's investment affiliate, Hunterbrook Capital, does not have any positions related to the fund, according to the newsletter.