Church fined by SEC

Peacefully · February 24, 2023

8 hours ago, bluebell said:

I’ve driven through Big Piney a few times, but I don’t remember very much about it. And I often get it confused with Pinedale, which I’ve also been through a few times. Is big Piney the one whose name sounds way more grand and majestic than the town actually is?

Edit to add, I’d say Rawlins is worse though. Native Wyomingites call that place the armpit of the state. There are probably a few towns (Baggs I’m looking at you) that are worse, but Rawlins is uniquely bad because it squanders its opportunities. It’s big enough that it should be have more resources. It’s on I-80, so it should be a nicer town just by virtue of the increase of visitors and theoretically money coming into it.

I don’t know what they do to keep it so crappy. It’s ugly and the weather is horrible so I don’t expect a whole lot, but it’s still worse than you would think it would be. 😂

Tell us how you really feel, rofl! 🤣

smac97 · February 24, 2023

34 minutes ago, ttribe said:

@smac97 I could be wrong, but I don't believe there is a "presumption of innocence" in civil matters.

Technically, in a civil case the "burden of proof" is in play. In a criminal context, a defendant is "innocent" until "proven guilty" via evidence which establishes guild "beyond reasonable doubt."

In a civil context, the plaintiff would still have the "burden of proof," but only to a "preponderance of evidence."

Compliance with SEC regulations can be presented, depending on the circumstances, as either a criminal or civil matter (or even both).

Civil cases do not typically deal with "innocence" versus "guilt," but rather "liable" versus "not liable." Nevertheless, in a sense, a presumption of innocence applies in civil as well as criminal matters. See, e.g, Fisher v. Superior Court (1980) 103 Cal.App.3d 434, 448, 163 Cal.Rptr. 47.

34 minutes ago, ttribe said:

I previously pointed out that the SEC has no criminal prosecution powers; those would need to be referred to the DOJ. This case was a civil matter.

Actually, there was no "case," just an investigation. There was no "civil matter" filed. Instead, the Church and the SEC agreed to a settlement.

And again, SEC compliance can have both civil and criminal dimensions.

Thanks,

-Smac

webbles · February 24, 2023

15 minutes ago, pogi said:

I agree with your point about the Business Managers. I have to ask though, if they honestly felt like everything was ethically on the up-and-up, why would they need to hide that information from the business managers in the first place? For me, the hiding of the info from the business managers is simply the cover up of other obvious unethical and untruthful behavior.

I don't think they were trying to hide the information from the business managers. The information is publicly available (you can see an example of a 13F filing for one of the 13 LLCs https://www.sec.gov/Archives/edgar/data/1568887/000156888719000004000156888719000004/0001568887-19-000004-index.htm). I think it is more likely they were streamlining it. But I could be wrong.

Kenngo1969 · February 24, 2023

2 hours ago, pogi said:

... If proof matters, then the church should have proven their case in court. Apparently they don't care enough about proof to make the effort - why should I? I can't prove anything, but neither am I going to toss these serious allegations under the rug as if they don't matter. They do matter and deserve consideration. ...

"Innocent Until Proven Guilty" ... unless we're speaking of the Church of Jesus Christ of Latter-day Saints. Mmm-kay. Gotcha.

ttribe · February 24, 2023

10 minutes ago, smac97 said:

Technically, in a civil case the "burden of proof" is in play. In a criminal context, a defendant is "innocent" until "proven guilty" via evidence which establishes guild "beyond reasonable doubt."

In a civil context, the plaintiff would still have the "burden of proof," but only to a "preponderance of evidence."

Compliance with SEC regulations can be presented, depending on the circumstances, as either a criminal or civil matter (or even both).

Civil cases do not typically deal with "innocence" versus "guilt," but rather "liable" versus "not liable." Nevertheless, in a sense, a presumption of innocence applies in civil as well as criminal matters. See, e.g, Fisher v. Superior Court (1980) 103 Cal.App.3d 434, 448, 163 Cal.Rptr. 47.

Actually, there was no "case," just an investigation. There was no "civil matter" filed. Instead, the Church and the SEC agreed to a settlement.

And again, SEC compliance can have both civil and criminal dimensions.

Thanks,

-Smac

I see no evidence the SEC considered any criminal elements to be part of this matter. The Order only references portions of the Exchange Act which are civil issues. From my experience and reading, the SEC handles matters subject to referral for criminal prosecution quite differently than to enforce a reporting requirement such as this one.

You've spent a great deal of time and energy holding the rest of us to very precise legal language and standards. I should think the discussion should use the correct standards. The fact is, there is no "presumption of innocence" in a civil matter, and that's what this is.

ETA: You don't need to repeat the "beyond a reasonable doubt" and "preponderance of the evidence" standards to me. I've testified in both civil and criminal matters and know the differences well.

Edited February 24, 2023 by ttribe

webbles · February 24, 2023

In case someone is curious in what the 13F form actually looks like, here is the PDF version of it - https://www.sec.gov/about/forms/form13f.pdf. And an electronically completed version can be seen at https://www.sec.gov/Archives/edgar/data/1568887/000156888719000004000156888719000004/0001568887-19-000004-index.htm (this from one of the mini LLCs).

pogi · February 24, 2023

49 minutes ago, smac97 said:

"Assumed to be innocent until they have been proven guilty."

This applies to legal criminal litigation and legal judgment. This is not a court of law. There is another kind of judgment we all need to make in issues of trust where due process is intentionally averted by parties and “proof” is impossible. I’m sorry but I am not to just assume that everyone who has not been”proven” guilty in a court of law is innocent of wrongdoing and deserves my trust.

Edited February 24, 2023 by pogi

california boy · February 24, 2023

36 minutes ago, pogi said:

I agree with this completely. I have stated as much previously that in terms of legal wrongs, I think this is pretty miniscule.

I have thought long and hard about why this particular issue is affecting me so adversely when compared against all the other issues that I have had with the church. I think seeing the extent that the church went to keep this secret gave me pause. It cause me to wonder that if they are willing to go to this level of deception and unethical behavior for something as simple as financial privacy, what else are they capable of in more serious matters? It is reminiscent of their treatment history. What about more serious matters like abuse, etc.? How far are they willing to go to hide stuff they think might have "negative consequences"? You know what they say about people getting busted for smoking weed (since you used that comparison) - it is almost guaranteed that it is not their first joint. After reading their response to these allegations, I am left feeling less assured that it will be their last. I have decided that it is not a matter of legal seriousness, it is a matter of trust. There is also the element of expecting my leaders to keep the same temple recommend standards that I am expected to keep. Do as I say and not as I do.

This is exactly how I feel about this issue. I don't think the seriousness of the findings is about the Church trying to hide its wealth. It is about the deception that took place in order to hide that wealth. I do admit I am triggered when it comes to dishonest actions by the Church. I can't just pass it off as being unimportant like some seem to be able to do given the seriousness of what I experienced and have seen repeatedly since leaving the Church. This isn't some one off deception.

JustAnAustralian · February 24, 2023

10 minutes ago, webbles said:

(this from one of the mini LLCs).

I wonder how they decided which securities to assign to each of the LLCs.

Edited February 24, 2023 by JustAnAustralian

pogi · February 24, 2023

27 minutes ago, Kenngo1969 said:

"Innocent Until Proven Guilty" ... unless we're speaking of the Church of Jesus Christ of Latter-day Saints. Mmm-kay. Gotcha.

See my response to smac above.

ttribe · February 24, 2023

33 minutes ago, Kenngo1969 said:

"Innocent Until Proven Guilty" ... unless we're speaking of the Church of Jesus Christ of Latter-day Saints. Mmm-kay. Gotcha.

This is not a criminal matter.

pogi · February 24, 2023

1 hour ago, smac97 said:

That is precisely how this works.

No. I am saying that the allegations have not been established as fact, either through admissions by the Church or via adjudication by an impartial factfinder.

When the Church expressly predicates its agreement to settle on not admitting any of the allegations asserted by the SEC, it most certainly does preserve the presumption of innocence.

See here:

"Assumed to be innocent until they have been proven guilty."

That hasn't happened here.

Oh, brother. The "court of public opinion" is meaningless. No rules. No adjudicator. No protections. Just utter mayhem.

You are judging the Church there? Well, okay. Have at it. But you will not be able to honestly and credibly assert that the Church violated securities laws.

Meanwhile, I hope you give some consideration to Matthew 7:2 - "For with what judgment ye judge, ye shall be judged: and with what measure ye mete, it shall be measured to you again."

Sure. But the SEC Order was not drafted in "the court of public opinion." It was, instead, drafted pursuant to the laws of the United States. It must therefore be viewed within that paradigm.

That doesn't mean that you can't throw the Church to the wolves in the "court of public opinion." Again, have at it.

But it does mean that you are acting out of anger and malice more than by reasoned assessment.

I agree. By way of example, I reached conclusions about Joseph Bishop in the McKenna Denson matter. But here's the thing: I did not reach those conclusions and then try to pass off my surmise as anything other than a surmise. I did not try to pass off my surmise as established "fact." And I also did essentially nothing with my surmise. I stated my surmised conclusions here, but otherwise I left the disposition of Joseph Bishop to the law of the land, and to God.

As for "judgments" we "HAVE to make" regarding this SEC story, what are you talking about there? We can surmise, sure. But then what? Aren't we supposed to forgive? "I, the Lord, will forgive whom I will forgive, but of you it is required to forgive all men." (D&C 64:10.) Does this apply to the folks running EPA? To the Brethren?

Moreover, does your "judgment" take into account the corrective measures the Church has taken? If not, why not?

Is it your place, or mine, to "judge" the folks involved in the SEC issue? If yes, how do you figure? If not, then what is it that you are doing right now?

I'm reminded of an episode of Frasier:

Is that what is going on here?

Oh, get real. Nobody has suggested anything of the kind.

You are required? How so? Where did this imperative arise?

And isn't "judge this matter" a sidestep? You seem to be judging people.

But after you have "judge{d} this matter," what next?

Thanks,

-Smac

I just finished reading the rest. I am not asserting anything as fact. That is a straw man. Everything I have said needs to be taken in the context of my person opinion and judgment based on the evidence I have had presented this far. I am open to be convinced otherwise, my judgment is not as strict and enduring as a court of law, it is much more malleable and open to further persuasion. As it stands, this is where I am at.

The corrective measures the church has taken has done nothing to address issues of broken trust.

Yes, there is an imperative to judge with a righteous judgment and not blindly trust. That is not talking about legal due process BTW.

As I stated previously, forgiveness is possible but I don’t have to trust those I forgive.

Edited February 24, 2023 by pogi

pogi · February 24, 2023

1 hour ago, smac97 said:

I agree. By way of example, I reached conclusions about Joseph Bishop in the McKenna Denson matter. But here's the thing: I did not reach those conclusions and then try to pass off my surmise as anything other than a surmise. I did not try to pass off my surmise as established "fact." And I also did essentially nothing with my surmise. I stated my surmised conclusions here, but otherwise I left the disposition of Joseph Bishop to the law of the land, and to God.

I am glad you agree. Now please leave me alone because that is all I am doing. If this was about Joseph Bishop, you'd be fine with judgments of public opinion without due process etc. But since it is about the church we get the "innocent until proven guilty" BS. Predictable. Don't look now but your bias is showing. Judgments in the court of public opinion are ok with Bishop and others, but if we make judgement in that court against the church then we should apply the following:

Quote

Oh, brother. The "court of public opinion" is meaningless. No rules. No adjudicator. No protections. Just utter mayhem.

You are judging the Church there? Well, okay. Have at it...

Meanwhile, I hope you give some consideration to Matthew 7:2 - "For with what judgment ye judge, ye shall be judged: and with what measure ye mete, it shall be measured to you again."

Figures!

Edited February 24, 2023 by pogi

Stormin' Mormon · February 24, 2023

On 2/21/2023 at 10:40 PM, smac97 said:

This may be where the legal advice went off the rails. I have no particular expertise in this area, but "investment discretion" appears to be defined by statute, 15 U.S.C. 78(c)(a)(35), as follows:

This part of a verbose Smac post way back on page 11 was where my thoughts on the matter solidified. And I don't think I've seen this point actually addressed since then.

It appears that the black-and-white definition of investment discretion in the US code literally says a person has investment discretion "even though some other person may have responsibility for such investment decisions."

Smac further lays out a case that the requirement for "sole" investment discretion appears to be a regulatory interpretation of the law, an interpretation that could very well be overturned by the courts as outside the statutory language. But that would only happen if some entity would rather try their luck in court.

My shrug at that point wasn't because I necessarily agreed with the Church in its interpretation of the statute, but because I could see how a good faith effort at reading and applying the statute could have lead them down that road.

I have no way of knowing whether the Church actually made this good faith effort or if their interpretation was simply self-serving and cynical.

But I continue to believe that the Church is guided by fundamentally decent human beings who are trying their best. So I believe that this was a mistake in statutory interpretation, a reliance on misguided legal advice, and not some nefarious scheme to circumvent the SEC.

pogi · February 24, 2023

1 hour ago, webbles said:

I don't think they were trying to hide the information from the business managers. The information is publicly available (you can see an example of a 13F filing for one of the 13 LLCs https://www.sec.gov/Archives/edgar/data/1568887/000156888719000004000156888719000004/0001568887-19-000004-index.htm). I think it is more likely they were streamlining it. But I could be wrong.

Just because it is publicly available doesn't mean they made every possible attempt to keep it hidden from them. If there was nothing to hide in the filings, why did they attempt to hide it from them?

Quote

27. Each Form 13F filed in the name of a Clone LLC misstated that the LLC had sole investment discretion for the securities listed, that there were no other managers for these securities, and that the Clone LLC had sole voting discretion over these securities. Even though the IMAs stated that Ensign Peak had delegated investment discretion, Ensign Peak continued to manage the entire portfolio and at all times maintained investment and voting discretion over all the securities listed in the Forms 13F.

It states above that there were misstatements on the filings. If the Managers were supposed to sign to assure their correctness, then it makes sense why they would hide it from them and only give them the signature page - otherwise their behavior makes no logical sense whatsoever. That is not normal ethical business behavtion to have managers attest to the correctness of documents without giving them the documents to review for "misstatements" etc.

Quote

28. Each Form 13F was signed by the designated Business Manager. The signature page stated, “The institutional investment manager filing this report and the person by whom it is signed hereby represent . . . that all information contained herein is true, correct and complete[.]” However, Ensign Peak provided the Business Managers with insufficient information about the Clone LLCs or the securities assigned to them that would enable the Business Managers to make this representation. When Ensign Peak obtained the Business Managers’ signatures for the Forms 13F, Ensign Peak gave the Business Managers only the signature pages of the Forms 13F and not the complete documents. In addition, the Forms 13F were often filed with electronic signatures before Ensign Peak actually obtained the Business Managers’ handwritten signatures.

Again, if they honestly didn’t think there was anything to hide, why go to such unethical lengths to hide it from the managers?

Edited February 24, 2023 by pogi

SeekingUnderstanding · February 24, 2023

1 hour ago, webbles said:

If people don't want to donate to the church because they don't like how it acts with its money, they shouldn't donate to it.

It goes a bit beyond that for me. Church's don't pay property taxes. Don't help fund schools, roads, or other public works, but take full advantage of all of them. If an organization wants to run as opaque as possible, great, let them. I just want nothing to do with subsidizing them.

pogi · February 24, 2023

19 minutes ago, Stormin' Mormon said:

This part of a verbose Smac post way back on page 11 was where my thoughts on the matter solidified. And I don't think I've seen this point actually addressed since then.

It appears that the black-and-white definition of investment discretion in the US code literally says a person has investment discretion "even though some other person may have responsibility for such investment decisions."

Smac further lays out a case that the requirement for "sole" investment discretion appears to be a regulatory interpretation of the law, an interpretation that could very well be overturned by the courts as outside the statutory language. But that would only happen if some entity would rather try their luck in court.

My shrug at that point wasn't because I necessarily agreed with the Church in its interpretation of the statute, but because I could see how a good faith effort at reading and applying the statute could have lead them down that road.

I have no way of knowing whether the Church actually made this good faith effort or if their interpretation was simply self-serving and cynical.

But I continue to believe that the Church is guided by fundamentally decent human beings who are trying their best. So I believe that this was a mistake in statutory interpretation, a reliance on misguided legal advice, and not some nefarious scheme to circumvent the SEC.

They were given a warning that it could be illegal. They chose to ignore the warning instead of seeking to clarify the law with the SEC. Shady. They neglected to do their legal due diligence in the face of a clear warning.

If they didn't think they had anything to hide, then I would expect them to not hide it from their business managers when signing to attest that all the information is correct. their behavior smells of shady business practices by people who suspect that what they are doing is ethically and legally questionable.

Edited February 24, 2023 by pogi

OGHoosier · February 24, 2023

1 hour ago, pogi said:

I agree with your point about the Business Managers. I have to ask though, if they honestly felt like everything was ethically on the up-and-up, why would they need to hide that information from the business managers in the first place? For me, the hiding of the info from the business managers is simply the cover up of other obvious unethical and untruthful behavior.

As then allegation goes, "even though" they reported that the LLCs had full control (that is what they had to report to guarantee privacy) they understood and acted differently. That is what they were hiding from the managers. They knew it was dishonest. That is the only reasonable explanation I can think of as to why they would intentionally hide info from these managers.

Dunno. I don't pretend to have an answer for that. They may have anticipated that some Business Managers would disagree with their interpretation of the law, or would not look up the relevant statute in order to get the relevant legal definitions. I agree that hiding the rest of the form was unethical. I don't think that necessarily means that the people at EPA thought their interpretation of the law was wrong, it just meant that they wanted to sidestep any disagreement. Like I said, I think what they did with the business managers is unethical, but I don't think it condemns the whole chain of command.

1 hour ago, pogi said:

Why would we be in a position to where we felt like we shouldn't pay tithing? Members of faith can handle "facile arguments". Those who pay for the wrong reasons perhaps shouldn't be coddled. We can do the right things for the right reasons. Everyone else can use their agency given correct and clear information and expectations. Either way you look at it he is saying that their motivation in all of this was to in essence infantilize us members.

The Church's assets have demonstrably provided a motivation for people to not pay tithing, this is observable, so I think that's one question answered right there. I've grown up during the era of Internet rhetoric, and I gotta tell ya, it has killed whatever "classical liberal" idealism I might once have had. The mere fact of the Church's holdings is enough to arouse passionate opposition, and the zeitgeist is only getting worse. I don't know how old you are, but I was a kid myself not long ago, and I do not believe for a moment that everybody is equipped to deal with "facile arguments" to the same degree. We aren't just dealing with arguments, but social pressure. An indignant ******* with two brain cells and an opinion can be a problem for people without the background knowledge or simple spine to take it. I am far more cynical about human understanding then you seem to be; I also have the curse of thinking that I'm right.

I also take issue with the statement "those who pay for the wrong reasons perhaps shouldn't be coddled." Okay, but I don't think Clarke is trying to coddle people into paying for the wrong reasons, I think he's trying to protect them from pressure. Nevertheless, I accept that we will probably read this differently. So be it.

Edited February 24, 2023 by OGHoosier

smac97 · February 24, 2023

On 2/23/2023 at 5:25 PM, california boy said:

You act as if your legal training gives you some superhuman insight unable to be achieved by us mere mortals that don't have a law degree to understand SEC rules and regulations.

Nope. Your lack of legal training and experience has no bearing on my competency as an attorney.

On 2/23/2023 at 5:25 PM, california boy said:

You are a foreclosure attorney for heavens sake.

I do quite a bit more than that. Business and real estate litigation requires me to cover a fairly broad spectrum of areas of law.

On 2/23/2023 at 5:25 PM, california boy said:

I am an artist and designer by profession. That hardly makes me qualified to do restoration work on the Sistine Chapel ceiling.

I have not claimed any expertise in securities laws.

However, I do know how to read a statute. I have a pretty good grasp of how administrative/regulatory law works. I am pretty conversant in some areas of constitutional law (Due Process being a biggie). And contracts. And civil procedure. And evidence.

In terms of legal acumen, dunking on someone with no legal training or experience doesn't mean anything. I've raised this point as to some posters who are making grandiose, embellished, substantively inaccurate claims about points of law, how the legal system works, allegations v. adjudicated facts, and so on. Normally I wouldn't care, but the conversation has been careening all over the place precisely because of the ignorantly bombastic declarations about this issues, this legal issue, that are being bandied about in this thread.

On 2/23/2023 at 5:25 PM, california boy said:

I don't find any of the SEC report to be all that difficult to read.

Nor did I. But did you read the governing statute, including how it existed 20+ years ago? Did you examine the portions of the Code of Federal Regulations associated with the governing statute? Did you research SEC guidelines, past and present, pertaining to the governing statute? Did you review the 13F form and case law associated with it? Did you research case law? Did you read similar orders issued by the SEC? Do you know the difference between an "allegation of fact" and a "finding of fact"? Did you research "no-admit-no-deny" settlements with the SEC, and case law addressing constitutional and other concerns pertaining thereto?

'Cuz I did.

I'm not resting on my laurels as an attorney. This topic happens to align with my line of work, my generalized area of training and experience. I found much of the rhetoric in this thread to be, forgive the word, ignorant ("uninformed" might be a kinder way of putting it). That rhetoric has also happened to be unfairly disparaging to a faith and religious community which I love dearly. And since I have the means to rebut those unfair disparagements, arising as they do in the realm of American civil law, I have voiced my opinions. As have you and other critics of my faith. Free Speech is a beautiful thing! And much of what has been said in this thread about the Church and the SEC's Order is wholesale crapola.

On 2/23/2023 at 5:25 PM, california boy said:

You are welcome to your opinion of course. But please, pretending that a foreclosure attorney has special insights to how the SEC handles things is way overblown.

Again, I do quite a bit more legal work that foreclosures. In fact, I haven't been doing foreclosure work for some years now.

I'm pretty comfortable with my ability to speak intelligently on this topic. I am less persuaded that you and Pogi and Analytics and other sources of condemnatory vitriol are so situated. No, you don't have to be an attorney, but you do need some familiarity with how the law works. And many of the comments I have been rebutting are rather clearly exposing a lack of such familiarity. And not just of the subtleties and nuances, but of really basic stuff.

On 2/23/2023 at 5:25 PM, california boy said:

Just make your arguments the best you can and quit with the I am an attorney, so I know more about this stuff than all you other people out there.

Candidly, I think I do know more than you do about the law. And I haven't just asserted this, I've demonstrated it.

Thanks,

-Smac

Edited June 9, 2023 by smac97

Tacenda · February 24, 2023

28 minutes ago, SeekingUnderstanding said:

It goes a bit beyond that for me. Church's don't pay property taxes. Don't help fund schools, roads, or other public works, but take full advantage of all of them. If an organization wants to run as opaque as possible, great, let them. I just want nothing to do with subsidizing them.

Same

smac97 · February 24, 2023

28 minutes ago, Stormin' Mormon said:

Quote

This may be where the legal advice went off the rails. I have no particular expertise in this area, but "investment discretion" appears to be defined by statute, 15 U.S.C. 78(c)(a)(35), as follows:

This part of a verbose Smac post way back on page 11 was where my thoughts on the matter solidified. And I don't think I've seen this point actually addressed since then.

Nor have I. I have since linked to it repeatedly, and still nobody has addressed it.

28 minutes ago, Stormin' Mormon said:

It appears that the black-and-white definition of investment discretion in the US code literally says a person has investment discretion "even though some other person may have responsibility for such investment decisions."

Yes, it says that.

What it does not say, however, is "sole investment discretion," a phrase the SEC Order uses in two key parts, the first being in the first paragraph of the "Summary":

Quote

The Forms 13F that Ensign Peak filed in the names of these LLCs misstated, among other things, that they had sole investment and voting discretion over the listed securities, when Ensign Peak at all times retained discretion over all investment decisions.

Per the statute, it seems like there is nothing actually wrong with EPA "retain{ing} discretion over all investment decisions." And yet the SEC seems to be saying otherwise.

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