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SEC Charges Mormon Church For Concealing $32 Billion Portfolio

The Securities and Exchange Commission (SEC) has charged an investment arm of the Mormon church for disclosure failures and misstated filings.

Ensign Peak, a nonprofit entity operated by the Church of Jesus Christ of Later-day Saints, agreed to pay a $4 million penalty for failing to file forms that would have disclosed the church’s equity investments, and instead filing forms for shell companies that concealed the Church’s portfolio – as well as misstated Ensign Peak’s control over investment decisions, according to the Wall Street Journal.

The church, which requires its members give 10% of their income in the form of tithing, itself agreed to pay a $1 million penalty, according to the SEC.

The SEC’s order finds that, from 1997 through 2019, Ensign Peak failed to file Forms 13F, the forms on which investment managers are required to disclose the value of certain securities they manage. According to the order, the Church was concerned that disclosure of its portfolio, which by 2018 grew to approximately $32 billion, would lead to negative consequences. To obscure the amount of the Church’s portfolio, and with the Church’s knowledge and approval, Ensign Peak created thirteen shell LLCs, ostensibly with locations throughout the U.S., and filed Forms 13F in the names of these LLCs rather than in Ensign Peak’s name. The order finds that Ensign Peak maintained investment discretion over all relevant securities, that it controlled the shell companies, and that it directed nominee “business managers,” most of whom were employed by the Church, to sign the Commission filings. The shell LLCs’ Forms 13F misstated, among other things, that the LLCs had sole investment and voting discretion over the securities. In reality, the SEC’s order finds, Ensign Peak retained control over all investment and voting decisions. -SEC

“We allege that the LDS Church’s investment manager, with the Church’s knowledge, went to great lengths to avoid disclosing the Church’s investments, depriving the Commission and the investing public of accurate market information,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “The requirement to file timely and accurate information on Forms 13F applies to all institutional investment managers, including non-profit and charitable organizations.”

Earlier this month the Journal reported that the SEC was investigating the Mormon church, after a former employee revealed in 2019 that the organization had amassed $100 billion of holdings.

The current size of Ensign Peak’s holdings remains a tightly held secret. The firm, based in Salt Lake City, was incorporated in 1997. Under SEC rules, it must disclose some types of investments, like U.S.-listed stocks, that it manages directly, which amounted to roughly $40 billion on Sept. 30. The remainder of the portfolio is made up of investments such as fixed-income securities, private companies or funds. Ensign Peak had an estimated $100 billion of holdings in 2019.

Investment managers with at least $100 million under management publicly report their stockholdings quarterly. The numbers are tracked by public companies and investors. About 5,000 entities file the form, according to SEC data made public in 2020. -WSJ

Ensign Peak and church officials say they haven’t violated nay tax laws, and that the fund was a “rainy-day account” to be used in difficult economic times.

READ 8 COMMENTS
  • Skeptical says:

    LDS is just another big business scam, like all big bloated organized religions. Save your money and get with God directly.

  • Badger says:

    A Morman is required to tithe 10%. It’s not a question, it’s the truth. At year end, the head of the family sits with someone higher up in the church, they go over their year earnings and if they find that 10% was not tithed, they have to write a check to make up the difference. If they don’t, they loose their Temple privileges. Oh my. The Mormons also go to the Temple, read over the obituaries of people who have attended church who have not been saved and baptize them after they are DEAD. That is the only way they can go to heaven and spend eternity with their families. God wants a cheerful giver. There is so much more about the religion that I know, and I don’t think there is space here to speak of it. Better yet, do some research, ask questions. It also strike me in the funny bone, that when a man and woman are married in the Temple, there are only a few lucky people who are able to attend the ceremony. It’s the reception that most people attend and they serve Koolaide and water. The most boring receptions I have ever attended were for my Mormon friends.

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