The Securities and Exchange Commission (SEC) is fining the Mormon Church and its investment manager a total of $5 million for allegedly failing to properly disclose its investment holdings, according to an order from the agency.
The SEC accused the Church of hiding its investments behind a number of inactive companies between 1997 to 2019 and not disclosing the size of its equity portfolio as a result, according to an order from the agency filed Tuesday. The Church operated Ensign Peak Advisers Inc., a non-profit that controlled the Church’s financial investments, according to a press release from the SEC. Ensign Peak created and filed forms under 13 shell companies instead of the company’s name, Time reported. The non-profit allegedly did so with the approval of the Church.
Ensign Peak will pay a penalty of $4 million to the SEC, while the Church will pay $1 million, according to the press release. (RELATED: SEC Announces It’s Fining NBA Hall Of Famer Paul Pierce $1.4 Million For Improperly Promoting Crypto Currency)
The Church said Ensign Peak “received and relied upon legal counsel regarding how to comply with its reporting obligations while attempting to maintain the privacy of the portfolio” starting in 2000, and that it created “separate companies” where required disclosure forms were filed, NBC News reported, citing a statement from the Church.
The SEC accused the church of going to “great lengths” to avoid disclosing its investments and, in doing so, “depriving the commission and the investing public of accurate market information.” https://t.co/KiH4iNgrmm
— NBC News (@NBCNews) February 21, 2023
“Ensign Peak and the Church believe that all securities required to be reported were included in the filings by the separate companies,” the statement continued, according to the outlet.
Allegations about the Church’s financial practices first appeared in 2018, when a group known as the Truth and Transparency Foundation said there was $32 billion in the church’s investments, NBC reported.
“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,” SEC Division of Enforcement Director Gurbir S. Grewal said in the press release.
“This settlement relates to how the forms were filed previously,” the Church said in a statement, according to NBC. “Ensign Peak and the Church have cooperated with the government over a period of time as we sought resolution. We affirm our commitment to comply with the law, regret mistakes made, and now consider this matter closed.”