Mormon church, investment arm to pay $5 million SEC fine over reporting issues

The Church of Jesus Christ of Latter-day Saints and its nonprofit investment arm will pay $5 million in fines and penalties to the Securities and Exchange Commission for failing to file disclosure forms, the church confirmed Tuesday.

Ensign Peak Advisors, the investment arm, paid a $4 million penalty and the church paid $1 million, the SEC said.

Church officials said “investment returns” will fund the penalty payments, which will “soon” be delivered to the Treasury Department.

“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 S. Grewal, director of the SEC’s Division of Enforcement, said in a statement. “The requirement to file timely and accurate information on Forms 13F applies to all institutional investment managers, including non-profit and charitable organizations.”

Ensign Peak was formed to manage a portfolio of about $32 billion in securities, including holdings in Apple Inc.; Alphabet, the parent company of Google; and Meta, the parent company of Facebook. It was required to report its stock holdings on a regular basis by filing SEC Form 13F.

The lack of compliance was exposed in 2019, when a whistleblower alleged the church had not been candid about its investment activities, saying it had amassed a $100 billion investment fund that included the securities holdings..

The SEC alleged that Ensign Peak had established 13 separate limited liability companies, or LLCs, that reported certain shareholdings without linking these back to the firm, which regulators said exercised authority over the investments.

The church said in a statement: “Since 2000, Ensign Peak received and relied upon legal counsel regarding how to comply with its reporting obligations while attempting to maintain the privacy of the portfolio. … Ensign Peak and the Church believe that all securities required to be reported were included in the filings by the separate companies.”

The church statement said consolidated Form 13F reports have been filed since it learned of the SEC’s concerns in June 2019. “We affirm our commitment to comply with the law, regret mistakes made, and now consider this matter closed,” the statement read.

The LDS Church places a heavy emphasis on members remitting a tithe of 10% of their income and makes faithfulness in such payments a requirement for a “temple recommend,” issued to members deemed “worthy” to participate in rituals at 173 temples in operation worldwide.