By Sam Boughedda
The Church of Jesus Christ of Latter Day Saints' investment arm has been charged by the federal Securities and Exchange Commission (SEC) on Tuesday with breaking federal tax laws.
The SEC said in a press release that the charges are against Ensign Peak Advisers, a non-profit organization operated by the Church to manage its investments, for "failing to file forms that would have disclosed the Church's equity investments, and for instead filing forms for shell companies that obscured the Church's portfolio and misstated Ensign Peak's control over the Church's investment decisions."
In addition, the SEC said it has charged the Church for causing the violations.
"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," commented Gurbir Grewal, Director of the SEC's Division of Enforcement.
In order to settle the charges, Ensign Peak has agreed to pay a $4 million penalty, and the Church will pay a $1M fine.
The regulator reveals that from 1997 through 2019, Ensign Peak failed to file Forms 13F, whereby investment managers must disclose the value of specific securities they manage.
They add that the Church was concerned that disclosing its portfolio holdings, which had grown to around $32 billion by 2018, would have negative consequences.
As a result, in order to obscure the amount in the Church's portfolio, and with its knowledge and approval, Ensign Peak formed thirteen shell LLCs and filed Forms 13F in the LLCs' names rather than in Ensign Peak's name.