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  4. The Mormon Church and its investment arm will pay $5 million to settle SEC charges that it went to 'great lengths' to avoid disclosures related to its massive portfolio

The Mormon Church and its investment arm will pay $5 million to settle SEC charges that it went to 'great lengths' to avoid disclosures related to its massive portfolio

Morgan Chittum   

The Mormon Church and its investment arm will pay $5 million to settle SEC charges that it went to 'great lengths' to avoid disclosures related to its massive portfolio
  • The Mormon Church and its investment adviser will pay millions to settle charges with the SEC.
  • The regulator says the Church's investment manager "went to great lengths" to avoid disclosures.

The Mormon Church and its investment manager will pay a total of $5 million to settle charges with the US Securities and Exchange Commission over failing to properly disclose holdings in the church's massive investment portfolio.

Ensign Peak Advisers, the non-profit that oversees the Church's portfolio, failed to comply with the regulator's disclosure rules by filing forms for shell companies that "obscured" the Church's investments, according to the SEC on Tuesday.

"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 Grewal, Director of the SEC's Division of Enforcement, said in a statement.

The Church of Jesus Christ of Latter-day Saints' has a $100 billion investment portfolio, according to a 13F form. Ensign Peak's top stock holdings as of December 31 include Walmart, Microsoft, Apple, and JPMorgan.

The Mormon Church's investments weren't publicly disclosed until a former Ensign portfolio manager filed a whistleblower complaint in 2019, alleging that the massive fund doesn't engage in any charitable activities and shouldn't have tax-exempt status.

Roger Clarke, the head of Ensign Peak, told the Wall Street Journal that the fund was an emergency account to be used in difficult times.

The investment activity has been the subject of some curiosity as to how an otherwise low-profile religious organization can amass such a massive portfolio.

The Journal reported that some of the money comes from donations from church members, a practice also known as tithing in which parishioners must give 10% of their annual income to remain in good standing.

"These funds are then used to build up the Church and to further God's work throughout the world," LDS' website reads. "God promises great blessings to those who pay tithing. Paying tithing demonstrates obedience and love and helps strengthen our faith in God."

The SEC alleges that from 1997 through 2019 Ensign Peak failed to file 13F forms, which are documents that certain investment managers must disclose quarterly, listing the securities that they manage.

"In June 2019, the SEC first expressed concern about Ensign Peak's reporting approach," LDS said in a statement on Tuesday. "Ensign Peak adjusted its approach and began filing a single aggregated report. Since that time, 13 quarterly reports have been filed in full accordance with SEC requirements."

"This settlement relates to how the forms were filed previously. Ensign Peak and the Church have cooperated with the government over a period of time as we sought resolution." the statement reads.



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