Mormon church fined for using shell companies to hide $32billion
'The Church was concerned that disclosure of its portfolio, which by 2018 grew to approximately $32 billion, would lead to negative consequences.'
The Mormon Church and its investment firm have been fined $5million for using shell companies to hide billions of dollars from federal regulators.
The US Securities and Exchange Commission (SEC) announced the settlement agreement with the the Church of Jesus Christ of Latter Day Saints (LDS), also known as the Mormon Church, on Tuesday after years of investigations into the church’s investment portfolio.
‘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,’ SEC director of enforcement Gurbir Grewal said.
According to the SEC, Ensign Peak Advisers Inc, the church’s investment firm, failed to file disclosure forms required by financial advisers who manage large assets, known as Forms 13F.
‘The Church was concerned that disclosure of its portfolio, which by 2018 grew to approximately $32 billion, would lead to negative consequences,’ the SEC said.
After an investigation beginning in 2019, the SEC found that the LDS Church approved of the decision to create 13 separate shell companies and filed disclosure forms for them instead.
The SEC also found that church leaders maintained full control over these shell companies.
The LDS Church said they stopped filing separate disclosure forms for shell companies after they were first notified of the SEC investigation in 2019.
‘We affirm our commitment to comply with the law, regret mistakes made, and now consider this matter closed,’ the church stated.
The LDS Church, which has over 17million members worldwide, collects 10% of most parishioners’ income in a process known as Tithing.
The church’s finances have come under much greater scrutiny over the last few years after a whistleblower alleged they were hiding over $100billion in funds.
After the SEC settlement was announced, the church said they own ‘stocks, bonds, commercial and residential real estate, and agricultural properties.’ They said all of their reserve funds are invested to further the church’s religious mission.
The church agreed to pay out $1million, while Ensign Peak will pay the remaining $4million. The church said this money will come from returns on investments.
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