The Church of Jesus Christ of Latter-day Saints and its investment arm have been fined $5 million for using shell companies to obscure the size of the portfolio under church control, the U.S. Securities and Exchange Commission announced.
“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, the agency’s enforcement director, said in a statement.
The faith, widely known as the Mormon church, maintains billions of dollars of investments in stocks, bonds, real estate and agriculture. Much of its portfolio is controlled by Ensign Peak Advisers, a nonprofit investment manager overseen by ecclesiastical leaders known as its presiding bishopric. The church has agreed to pay $1 million and Ensign Peak will pay $4 million in penalties based on the violation.Federal investigators said for 22 years, the firm hadn’t filed required paperwork to disclose the value of some assets in violation of the Securities Exchange Act and agency rules.
Instead, they said, with the church’s knowledge, Ensign Peak filed the forms through 13 shell companies they created, even as they maintained decision-making power. They also had “business managers,” most employed by the church, sign the required shell company filings.
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