The Church of Jesus Christ of Latter-day Saints to pay $5 million in SEC settlement

The Provo Temple sits near the base of Kyhv Peak in Provo. The Church of Jesus Christ of Latter-day Saints was fined by the Securities and Exchange Commission (SEC) for not disclosing information regarding equity investments. (Megan Zaugg)

The Church of Jesus Christ of Latter-day Saints will pay $5 million in fines to the Securities and Exchange Commission (SEC) for failing to file forms disclosing information about their equity investments.

According to a press release from the SEC, Ensign Peak, the Church’s investment manager, failed to file the Forms 13F correctly from 1997 to 2019. The forms require investment managers to “disclose the value of certain securities they manage,” the SEC said. The form is meant to increase public availability of information to “increase investor confidence in the integrity of the United States securities market,” according to the SEC.

Ensign Peak established 13 separate companies (LLCs) that each filed Forms 13F, instead of a singular report, according to a statement from the Church.

The SEC said the shell companies misstated on the Forms 13F that they had sole investment and voting discretion over the securities, when in reality, Ensign Peak retained control over the securities.

The Church said Ensign Peak received and relied on legal counsel regarding how to comply with reporting obligations while also maintaining their portfolio’s privacy and in turn, they established the LLCs.

“Ensign Peak and the Church believe that all securities required to be reported were included in the filings by the separate companies,” the Church’s statement said.

The SEC order also said the Church was concerned about disclosing its portfolio, which by 2018 had reached $32 billion.

“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 S. Grewal, the SEC’s Division of Enforcement director, said.

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

The SEC expressed concern about the reporting approach in June 2019, when Ensign Peak adjusted and began filing singular reports. Since then, 13 reports have been filed in “full accordance with SEC requirements,” the Church’s statement said.

Ensign Peak agreed to pay a $4 million penalty and the Church agreed to pay a $1 million penalty.

The Church said it has cooperated with the government to resolve the issue and the penalties will be paid to the U.S. Treasury.

“We affirm our commitment to comply with the law, regret mistakes made, and now consider this matter closed,” their statement said.

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