SEC Charges Church of Jesus Christ of Latter-day Saints For Misstating Filings

The Securities and Exchange Commission today announced that it would be fining the Church of Jesus Christ of Latter-Day Saints related to its investment management practices. Specifically, the SEC has charged Ensign Peak Advisors, which is a non-profit operated by the Church.

The fine relates to the firm failing to file Forms 13F from 1997 through to 2019. Form 13F requires investment managers to disclose the value of securities they manage, which would have disclosed equity investments made by the Church. Instead, Ensign elected to file forms for shell companies as a means of disguising who owned the securities, while at the same time misstating the the control Ensign had over investment decisions for the Church.

In justifying its decision to file fake forms, the Church was “concerned that disclosure of its portfolio .. would lead to negative consequences.” During that same time frame the Church saw its holdings climb as high as $32 billion.

Executing the scheme

The scheme conducted by Ensign consisted of thirteen shell companies being established across the United States, which then had Form 13F’s filed in their name. Nominee business managers were then used to sign related filings with the Securities and Exchange Commission, with the filings stating that the LLC’s had full control over the investments and voting discretion on those investments.

In reality, Ensign had full control over all investment and voting decisions, while also maintaining full control over the LLC’s.

“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 Director of SEC’s Division of Enforcement Gurbir S Grewal.

“The requirement to file timely and accurate information on Forms 13F applies to all institutional investment managers, including non-profit and charitable organizations,” he continued.

Despite the falsified statements occurring for a 22 year period, total fines issued in relation to the matter amount to a paltry $5.0 million – roughly a $227,000 fee per year that the scheme was conducted. Of that figure, the Church has agreed to pay $1.0 million, while Ensign Peak will pay $4.0 million – a drop in the bucket versus the $32.0 billion the fund amassed during that time frame.

Tax dodging

Ensign Peak Advisors meanwhile has been in the news as of late following a whistleblower complaint that alleges The Church of Jesus Christ of Latter-day Saints had built an investment portfolio exceeding $100 billion off the back of donations made for charitable purposes. The Church requires patrons to submit 10% of their income to the church, in a process known as tithing.

The whistleblower, David Nielsen whom is a former portfolio manager for Ensign, has urged the IRS to remove the non-profit status of its tax-exemption, a move which would result in billions being owed in taxes.

At the same time Nielsen alleged that the church takes in $7.0 billion annually from contributions, of which $6.0 billion is spent on operating costs. The remainder is sent to Ensign for the Church’s investment portfolio. Instead of using those funds for charity, its alleged that the funds instead are being used to prop up businesses that include an insurance firm and a mall in Salt Lake City. Nielsen further suspects that the church has investment holdings outside of Ensign Peak Advisors as well.

Nielsen’s complaint is believed to have led to the fines issued today against Ensign and the Church.


Information for this briefing was found via the SEC, Salt Lake City Tribune, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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