The Church of Jesus Christ of Latter-day Saints and its investment arm have been fined $5 million for using shell companies to obscure the size of the portfolio under church control, the U.S. Securities and Exchange Commission announced Tuesday.
The faith, widely known as the Mormon church, maintains billions of dollars of investments in stocks, bonds, real estate and agriculture. Much of its portfolio is controlled by Ensign Peak Advisers, a nonprofit investment manager overseen by ecclesiastical leaders known as its presiding bishopric.
The church has agreed to pay $1 million and Ensign Peak will pay $4 million in penalties based on the violation.
Ensign Peak avoided disclosing investments 91裸聊视频渨ith the church91裸聊视频檚 knowledge,91裸聊视频� denying the SEC and the public of accurate information required under law, Gurbir Grewal, the agency91裸聊视频檚 enforcement director, said in a statement.
Federal investigators said for a period of 22 years, the firm violated agency rules and the Securities Exchange Act by not filing paperwork required that disclosed the value of its assets.
Instead, they said Ensign Peak filed the forms through 13 shell companies they created, even as they maintained decision-making power. They also had 91裸聊视频渂usiness managers,91裸聊视频� most employed by the church, sign the required shell company filings.
91裸聊视频淭he Church was concerned that disclosure of its portfolio, which by 2018 grew to approximately $32 billion, would lead to negative consequences,91裸聊视频� the SEC said in a statement announcing the charges.
Increasingly, the church and its Salt Lake City-based investment arm have faced scrutiny over the fact that tax law largely exempts religious groups from paying U.S. taxes. Ensign Peak is registered as a supporting organization and integrated auxiliary of the church. Investment managers of its size are required to report stockholdings quarterly.
It gained traction in 2019 when a whistleblower alleged the church had stockpiled nearly $100 billion in funds, rather than directing it toward charitable causes. Ensign Peak has since been a source of intrigue and mystery for the nearly 17-million member Utah-based faith, which encourages members worldwide to give 10% of their income in a what is known as 91裸聊视频渢ithing.91裸聊视频�
Two years later, prominent church member James Huntsman filed a lawsuit against the church alleging it misrepresented how it used donations and, rather than direct them to charitable causes, invested in assets including real estate and an insurance business. A judge dismissed the complaint last year and Huntsman later appealed the decision.
Earlier this month, the 2019 whistleblower, a former Ensign Peak investment manager named David Nielsen, submitted a 90-page memorandum to the U.S. Senate Finance Committee demanding oversight into the church91裸聊视频檚 finances.
In a statement, church officials said over the time period investigated, none of their holdings had gone unreported and all had been disclosed through the separate companies. They said they had 91裸聊视频渞elied upon legal counsel regarding how to comply with its reporting obligations while attempting to maintain the privacy of the portfolio91裸聊视频� and noted that Ensign Peak had changed its reporting approach after learning of the SEC91裸聊视频檚 concerns in 2019.
91裸聊视频淲e affirm our commitment to comply with the law, regret mistakes made, and now consider this matter closed,91裸聊视频� they said.
Sam Brunson, a church member and tax law professor at Loyola University Chicago, said the $5 million fine differed from past accusations leveled against Ensign Peak because the church appears to have admitted some fault.
A failure to fill out SEC paperwork may not fuel broader conversations about how the church manages its money, he said, yet it reflects an 91裸聊视频渋ncredibly aggressive91裸聊视频� strategy to keep certain information from the public.
91裸聊视频淔or the last 70 years or so, the Mormon Church has had an ethos of keeping its finances private,91裸聊视频� Brunson said.
By Sam Metz
THE ASSOCIATED PRESS
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