SECP Fined Mormon Church For Obscuring $32 Billion Investment Portfolio

(CTN NEWS) – SALT LAKE CITY – On Tuesday, the Securities and Exchange Commission levied a $5 million fine against Mormon Church and its investment arm for using front businesses to hide the size of the church-controlled portfolio.

As is well known, the Mormon Church has enormous investments in agriculture, real estate, equities, and bonds.

The non-profit investment firm Ensign Peak Advisers is governed by the presiding bishopric, which is composed of ecclesiastical authorities.

Ensign Peak will pay $4 million in fines, while the Mormon church has agreed to pay $1 million.

Ensign Peak allegedly avoided disclosing investments “with the church’s knowledge,” denying the SEC and the precise public information required by law, according to Gurbir Grewal, the SEC’s enforcement director.

Federal investigators claim that the company failed to complete paperwork that showed the worth of its assets for a period of 22 years, in violation of both agency regulations and the Securities Exchange Act.

The Mormon Church Must Commence Tax Payments

Instead, they asserted Ensign Peak submitted the paperwork through 13 front companies they set up while still holding the power of decision. Additionally, they had “business managers,” who were mostly church members, sign the necessary shell company forms.

The SEC stated in a statement announcing the accusations that “The Mormon Church was concerned that disclosing its portfolio, which had grown to about $32 billion by 2018”.

The church and its investment arm in Salt Lake City have drawn more attention since religious institutions are exempt from American taxation. Ensign Peak is an integrated auxiliary and supporting organization registered with the church.

Big investment managers must submit a quarterly stock holdings report.

A whistleblower’s allegations that the church had accumulated about $100 billion in funds instead of allocating them to charitable organizations gave the claim more traction in 2019.

Since that time, Ensign Peak has captivated and mystified the roughly 17 million members of the Utah-based religion, inspiring followers everywhere to contribute 10% of their income—a practice known as “tithing.”

James Huntsman, a well-known church member, sued the Mormon church two years later, claiming that the church had misrepresented how donations were used and had invested them in assets like real estate and an insurance company rather than using them for charitable activities.

Huntsman contested the judge’s dismissal of the complaint from the previous year.

The United States Senate Finance Committee received a 90-page memo from the 2019 whistleblower, David Nielsen, a former investment manager at Ensign Peak, earlier this month seeking control of the Mormon church’s finances.

Church officials Claim None Of Their Assets Were Hidden.

Officials from the Mormon Church insisted that all of their interests were disclosed through different entities and that none remained unregistered during the time of the study.

According to them, they “relied on legal assistance over how to comply with its reporting obligations while striving to safeguard the privacy of the portfolio,” and Ensign Peak altered its reporting strategy after becoming aware of the SEC’s worries in 2019.

We reaffirm our dedication to upholding the law, sincerely regret any mistakes, and now believe this matter to be over, they stated.

The $5 million punishment, according to Sam Brunson, a member of the Mormon church and professor of tax law at Loyola University Chicago, is different from earlier charges brought against Ensign Peak since it appears that the church has recognized some guilt.

Although the church’s failure to file SEC filings may not lead to more in-depth conversations about how it manages its finances, it does reveal an “extremely aggressive” approach to keeping some information secret from the public, he claimed.

Over the past 70 years, the Mormon Church has maintained a private financial policy, according to Brunson.

RELATED CTN NEWS:

South Korea’s Birth Rate Sinks To A Record Low As Population Crisis Deepens For Third Year in 2022

Russian Military Denies Its Brand-New Zircon Hypersonic Missiles To The Test