The U.S. Securities and Exchange Commission headquarters in Washington on Feb. 23, 2022.
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WASHINGTON — The Church of Jesus Christ of Latter-day Saints, the leading Mormon denomination, and a nonprofit operating under it’ll pay $5 million to settle Securities and Exchange Commission charges that the church didn’t disclose its relationship to shell corporations.
The SEC’s order said Ensign Peak Advisers Inc., the Utah-based nonprofit that manages the church’s investments, hid the scale of the church’s equity portfolio under 13 limited liability corporations — including 12 “clone LLCs” — from 1997 through 2019.
The nonprofit also didn’t file Forms 13F, that are required to reveal the worth of certain securities overseen by investment managers, based on the SEC. The forms were filed within the name of the shell corporations, as an alternative of Ensign Peak Advisers. The agency said the records also misstated that the LLCs had sole investment and voting discretion over the securities, which the nonprofit really controlled.
The SEC said the church’s concern over negative public response to the disclosure of its vast investment portfolio, which reached $32 billion in value in 2018, prompted the steps to mask its holdings.
Ensign Peak Advisers agreed to pay a $4 million penalty to the SEC, while the church agreed to pay $1 million, the agency said.
“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,” Gurbir Grewal, director of the SEC’s Division of Enforcement, said in an announcement. “The requirement to file timely and accurate information on Forms 13F applies to all institutional investment managers, including non-profit and charitable organizations.”
The Church of Jesus Christ of Latter-day Saints told CNBC that it “cooperated with the federal government” and considers “this matter closed.”
“Since 2000, Ensign Peak received and relied upon legal counsel regarding tips on how to comply with its reporting obligations while attempting to keep up the privacy of the portfolio. In consequence, Ensign Peak established separate corporations (LLCs) that every filed Forms 13F as an alternative of a single aggregated filing. Ensign Peak and the Church consider that each one securities required to be reported were included within the filings by the separate corporations,” Chris Moore, a church spokesperson, told CNBC.
“This settlement pertains to how the forms were filed previously. Ensign Peak and the Church have cooperated with the federal government over a time period as we sought resolution,” Moore added.
— CNBC’s Jim Forkin contributed to this story.
