Church of Jesus Christ of Latter-day Saints and Its Advisor to Pay $5M in SEC Fines

According to the order, the church was concerned that disclosure of its portfolio, which by 2018 grew to approximately $32 billion, would lead to negative consequences.

The order finds that “Ensign Peak maintained investment discretion over all relevant securities, that it controlled the shell companies, and that it directed nominee ‘business managers,’ most of whom were employed by the Church, to sign the Commission filings,” the SEC states.

The shell LLCs’ Forms 13F misstated, among other things, that the LLCs had sole investment and voting discretion over the securities. In reality, the SEC’s order finds, Ensign Peak retained control over all investment and voting decisions.

Gurbir Grewal, director of the SEC’s Division of Enforcement, said the agency alleges 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.”

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

Ensign Peak agreed to settle the SEC’s allegation that it violated Section 13(f) of the Securities Exchange Act of 1934 and Rule 13f-1 thereunder by failing to file Forms 13F and for misstating information in these forms.

The Church agreed to settle the SEC’s allegation that it caused Ensign Peak’s violations through its knowledge and approval of Ensign Peak’s use of the shell LLCs, according to the SEC.