Church fined by SEC

[bluebell]

21 minutes ago, pogi said:

Then read it yourself. It's not that long.  Come to your own conclusions.  The "great lengths" they took are extremely concerning to me.  

Because he was the head/President of the EPA and would know better than anyone else, and because he was willing to go to the extent of being willing to go on record and have himself directly quoted in the Wall Street Journal knowing that the church would read it.  Why should we not trust Roger Clarke, sincere question?  Is he untrustworthy?  Does he have a bias against the church that might skew his interpretation?  The why's would have been explicitly discussed with the First Presidency - that would be kind of hard to misinterpret if it was explicitly discussed.  

I am not going to play semantics.  They said "great lengths" and then continued to outline in over 30 explicit points the details of the measures they took to mislead the public.  They lied on the reports.  They told the SEC that the LLCs had full control when they know that the EPA had full control.  They made this same "misstatement" year after year for 20 years.  That is no accident!  That is called lying.  They then attempted to hide this from managers by having them sign off on things without giving them the full report.    That is only a small taste of the incredible measures ("great lengths") they went to.  It is incredible considering the institution. 

I appreciate tribe as well, it is very helpful, but I am coming from a position of betrayed trust of an organization that I have committed my life to, please forgive the "drama" but I don't appreciate the making light of my experience and reducing it to "drama".  I am angry.  I need time to process it all.  But I honestly don't know how anyone who has read the SEC report would defensive of their actions.  It is inexcusable, yet they try to excuse it as unintentional (that is a lie) and equivalent to a traffic ticket.  That is not ok!  When is there going to be accountability for the "great lengths" they took to deceive to keep me obedient in paying tithing?  Enough with the parent child relationship!  Treat me like an adult who can do the right things for the right reasons. 

 

I agree that our emotional reactions to these findings, which themselves stem from our biases, impact our interpretation of things and will sometimes naturally lead to dramatic expressions.

When attempting to sus out allegations and facts, etc. I just find them kind of useless (in that context). I’ve mostly been skipping the posts where it’s obvious that is happening. I wanted ttribe to know I appreciate his efforts, otherwise this thread would be a quagmire of drama and I’m not interested in wading through all of that emotion right now.

(Which isn’t to argue that everyone should be reacting as I am or that people who are using dramatic language are in the wrong. We don’t all have the same motivations for being a part of this thread and that’s fine).

I’m working my way through the SEC order, though Smac has pointed out some reasons why it’s not super easy to interpret either. Lots of legal language and legal definitions I’m not familiar with.

As for Clarke, I have no idea who he is so my reaction to him tends to be neutral. Neither untrustworthy nor trustworthy. Where he is able to provide evidence of his accusations I have no problem accepting them. Where he is unable to provide evidence, I’ll take that with a grain of salt since I have no idea what his personal biases are.  That is not a negative judgement against him but an acknowledgment of my limited ability to judge the merits of his claims if I have nothing to go off but his word.

[Analytics]

7 hours ago, smac97 said:

And yet it's Order still contains unproven and unsubstantiated allegations.

Law enforcement and prosecutors can spent years investigating something, but the duration of an investigation doesn't equate with a factual finding by an adjudicative body.

And contrary to your calumnies, the Church has not admitted to, and the SEC has neither charged nor even referenced, "fraud."

And yet the order is expressly predicated on an offer of settlement from the Church, with no admission or denial of the findings.

So the findings remain . . . allegations.  That is, "claim{s} of fact not yet proven to be true."

On March 6 I will be participating in a mediation involving the Utah Labor Commission.  The allegation is that my client fired an employee based on her gender and religious affiliation (or lack thereof).  My client is adamant that this is utterly untrue.  The claimant secretly contacted one of my client's other employees, told him that he will be a "key" witness, and also asked him repeatedly to "confirm" a number of claims she has presented to the Labor Commission.  Instead, he has signed an affidavit in which he expressly rejects the claimant's allegations.  The claimant has also apparently withheld the identities of the other witnesses she intends to call.  I suspect this is because she wants to get to the mediation and claim to have - without identifying - witnesses who will back her up.  Also, her claims arise almost exclusively from the decision-making processes of a small executive hiring committee, and all of the members of that committee are prepared to testify that they fired the claimant on "for cause" grounds.

Nevertheless, we will likely pay some small amount to settle the matter.  That is often how these things play out.  Allegations are made, but not proven or demonstrated through the presentation of competent, probative, admissible, sufficient evidence.  Instead, the parties leave the facts unresolved and settle the matter.

I think the SEC Order reflects that. 

A friend of mine works for a company that received a $200,000,000 fine from the SEC a couple of years ago, and he had a senior role involving that investigation. He described a process that wasn't adversarial in nature, but instead was a very deep and exhaustive dive by a group of professionals that wanted to get to the truth. Because the company was cooperating with the SEC, the process wasn't adversarial. There were a ton of documents handed over, and a ton of interviews. Yes, there were lawyers everywhere, and sometimes it resembled a deposition more than a collegial discussion about the facts. But by the end of the day, the SEC wanted to understand the facts of the case, and the company in question had zero incentive to be anything other than cooperative in making sure the facts were in fact understood. There could be a disagreement about how the law applies in a particular case or about whether the penalty is appropriate. But presuming the target company cooperates, there is very little reason to doubt that the SEC's reports get the facts straight.

That's my (second-hand) experience with the SEC.

[ttribe]

There is a great deal of talk about "allegations," so much so that those "allegations" have been labeled as "unfounded" and "unsubstantiated." Please note this opening language from the Order:

"On the basis of this Order and Respondents’ Offers, the Commission finds that:"

At which point, the Order lists off all of its findings, not allegations. It's a critical distinction and the Church agreed to this Order.

[MustardSeed]

1 minute ago, ttribe said:

There is a great deal of talk about "allegations," so much so that those "allegations" have been labeled as "unfounded" and "unsubstantiated." Please note this opening language from the Order:

"On the basis of this Order and Respondents’ Offers, the Commission finds that:"

At which point, the Order lists off all of its findings, not allegations. It's a critical distinction and the Church agreed to this Order.

This is hardly defensible. There’s a time and place to reflect as an organization So that we don’t replicate these errors.

[ttribe]

38 minutes ago, ttribe said:

There is a great deal of talk about "allegations," so much so that those "allegations" have been labeled as "unfounded" and "unsubstantiated." Please note this opening language from the Order:

"On the basis of this Order and Respondents’ Offers, the Commission finds that:"

At which point, the Order lists off all of its findings, not allegations. It's a critical distinction and the Church agreed to this Order.

As a follow-on to this, everything from paragraph 3. through paragraph 35. falls under a general heading of "Facts" (emphasis in original). There are sub-headings for various topics into which those paragraphs fall, but they are all listed as "Facts" by the SEC. Again, not allegations, but facts. This is the Commission's documentation of Findings of Fact. This is nothing like a civil complaint, as has been suggested elsewhere in this thread.

As to the SEC's historical propensity to settle cases with no admission (or denial) of guilt, that can be summarized as follows:

"The U.S. Securities and Exchange Commission settles the overwhelming majority of its enforcement actions, most with consent decrees where the defendant “neither admits nor denies” wrongdoing. The SEC has publicly defended its use of “neither admit nor deny” settlements, arguing they: (1) reduce the time and resources required to litigate a case, (2) expedite recovery for defrauded investors, and (3) protect defrauded investors by reducing the risk that the SEC will lose at trial. As John Coffee recently noted, “[e]very few years, the issue is certain to be raised: Why does the SEC persist in ‘neither admit nor deny’ settlements, which allow an issuer to avoid acknowledging any misconduct?”

Source: https://wp.nyu.edu/compliance_enforcement/2021/01/19/admissions-of-guilt-to-the-sec-under-chair-jay-clayton/

Edited February 22, 2023 by ttribe

[SeekingUnderstanding]

9 minutes ago, ttribe said:

As a follow-on to this, everything from paragraph 3. through paragraph 35. falls under a general heading of "Facts" (emphasis in original). There are sub-headings for various topics into which those paragraphs fall, but they are all listed as "Facts" by the SEC. Again, not allegations, but facts.

Statements of facts which the church, despite releasing a lengthy statement, has not denied or disputed. 

[Teancum]

10 hours ago, smac97 said:

The Church will be paying millions in fines.

Yes.  Because they were guilty at going to lengths to hide their investments from the SEC.

 

10 hours ago, smac97 said:

The Church has publicly stated: "We affirm our commitment to comply with the law, regret mistakes made and now consider this matter closed."

In other words we got caught doing something we should not have done.

10 hours ago, smac97 said:

And yet here you are, imputing to it a "bogus cop out."

Heads we lose, tails we lose.  No matter what we do, faultfinders will ply their trade.

Oh boo hoo. This is one you really should not try to defend and not whine about.  There is good reason to find fault with this.

[ttribe]

8 minutes ago, SeekingUnderstanding said:

Statements of facts which the church, despite releasing a lengthy statement, has not denied or disputed. 

Correct.

[The Nehor]

I agree with the concept that this is akin to paying a speeding ticket fine. Different scale of penalty but the reality is that getting hit with these occasionally is sometimes the cost of doing business. You see something similar with political campaign finance law where candidates (particularly national ones) are going to get hit with minor violations because of the way the whole thing is structured. It is not (as some would try to spin it) showing there was an intent to deceive. It is just a cost of doing business in that field. Important caveat: Some campaign finance violations are definitely attempts to deceive and should be punished more severely both legally and by social scorn that costs the person an election.

That being said this was an attempt by the Church to hide assets. Not from the government itself but from the public (both inside and outside the church). You can argue about whether that was the right thing to do but it was what they did.

If you think having this wealth and having it shielded from taxation is wrong that is fine but it is legal. The correct avenue to take is to encourage changes in tax law and also probably better fund agencies that investigate this since this setup is not new, happens all the time, and while legal in this case is often used to do illegal things. If you want to see someone trying to ineptly hide assets in real time while being watched follow the Alex Jones shenanigans. It is not working since he is already under a microscope but it does work well when people aren’t paying attention.

[ttribe]

3 minutes ago, The Nehor said:

I agree with the concept that this is akin to paying a speeding ticket fine. Different scale of penalty but the reality is that getting hit with these occasionally is sometimes the cost of doing business. You see something similar with political campaign finance law where candidates (particularly national ones) are going to get hit with minor violations because of the way the whole thing is structured. It is not (as some would try to spin it) showing there was an intent to deceive. It is just a cost of doing business in that field. Important caveat: Some campaign finance violations are definitely attempts to deceive and should be punished more severely both legally and by social scorn that costs the person an election.

That being said this was an attempt by the Church to hide assets. Not from the government itself but from the public (both inside and outside the church). You can argue about whether that was the right thing to do but it was what they did.

If you think having this wealth and having it shielded from taxation is wrong that is fine but it is legal. The correct avenue to take is to encourage changes in tax law and also probably better fund agencies that investigate this since this setup is not new, happens all the time, and while legal in this case is often used to do illegal things. If you want to see someone trying to ineptly hide assets in real time while being watched follow the Alex Jones shenanigans. It is not working since he is already under a microscope but it does work well when people aren’t paying attention.

This has nothing to do with tax law. None of this was done to shelter assets from taxation. Everything that is in this matter is about violations of securities law. Those are very different things.

[Tacenda]

All these memes going around, and truth in them IMO. And a quote by Brene Brown and Roger Clarke.

 "This week, Roger Clarke, the head of Ensign, told WSJ, 'Paying tithing is more of a sense of commitment than it is the church needing the money. So they never wanted to be in a position where people felt like, you know, they shouldn’t make a contribution." https://www.dailymail.co.uk/news/article-11738197/Mormon-Church-faces-SEC-probe-past-efforts-100-billion-investments-secret.html

“When the culture of an organization mandates that it is more important to protect the reputation of a system and those in power than it is to protect the basic human dignity of individuals or communities, you can be certain that shame is systemic, money drives ethics, and accountability is dead.” Brene Brown

[Rain]

24 minutes ago, ttribe said:

This has nothing to do with tax law. None of this was done to shelter assets from taxation. Everything that is in this matter is about violations of securities law. Those are very different things.

What is "securities law"?  Please explain like I'm a 5-year-old.  

[CV75]

27 minutes ago, ttribe said:

This has nothing to do with tax law. None of this was done to shelter assets from taxation. Everything that is in this matter is about violations of securities law. Those are very different things.

Not securities law, but an SEC Rule: Form 13F (sec.gov)

[ttribe]

Just now, CV75 said:

Not securities law, but an SEC Rule: Form 13F (sec.gov)

13-F refers to the applicable section of the Exchange Act of 1934. This is about securities law.

[CV75]

2 minutes ago, Rain said:

What is "securities law"?  Please explain like I'm a 5-year-old.  

In this case, it's hyperbole for rhetorical effect: it is a rule. The differences between Rules and Laws can be easily Googled.

[CV75]

Just now, ttribe said:

13-F refers to the applicable section of the Exchange Act of 1934. This is about securities law.

That statement confirms its status as a Rule, not a law. I provided the link designating it a Rule.

[ttribe]

5 minutes ago, Rain said:

What is "securities law"?  Please explain like I'm a 5-year-old.  

Quick definition:

"Securities laws are the federal and state statutes and regulations that control the sale or transfer of rights or ownership interests in a business entity (securities). Specifically, securities laws purport to protect the general public from deceptive practices in the sale or trade of securities. The major securities laws include the Securities Act of 1933 and the Securities Exchange Act of 1934. The primary method of protecting investors prescribed under these acts is thorough disclosure of relevant or material information."

Source: https://thebusinessprofessor.com/en_US/business-transactions/what-are-securities-laws

[CV75]

1 minute ago, ttribe said:

Quick definition:

"Securities laws are the federal and state statutes and regulations that control the sale or transfer of rights or ownership interests in a business entity (securities). Specifically, securities laws purport to protect the general public from deceptive practices in the sale or trade of securities. The major securities laws include the Securities Act of 1933 and the Securities Exchange Act of 1934. The primary method of protecting investors prescribed under these acts is thorough disclosure of relevant or material information."

Source: https://thebusinessprofessor.com/en_US/business-transactions/what-are-securities-laws

And what are SEC Rules? SEC.gov | Rules and Regulations for the Securities and Exchange Commission and Major Securities Laws

Edited February 22, 2023 by CV75

[ttribe]

2 minutes ago, CV75 said:

In this case, it's hyperbole for rhetorical effect: it is a rule. The differences between Rules and Laws can be easily Googled.

 

1 minute ago, CV75 said:

That statement confirms its status as a Rule, not a law. I provided the link designating it a Rule.

I am not engaging in hyperbole.

From the Order -

"36. As a result of the conduct described above, Ensign Peak violated Section 13(f)(1) of
the Exchange Act and Rule 13f-1 thereunder by failing to file Forms 13F in Ensign Peak’s name.
Ensign Peak also violated Section 13(f)(1) of the Exchange Act and Rule 13f-1 thereunder by
filing misstated Forms 13F in the names of LLCs created for the sole purpose of filing Forms 13F."

The violation is both the law and a rule.

[ttribe]

Just now, CV75 said:

And what are SEC Rules?

They are specific reporting requirements based on specific elements of the law; typically the 33 and 34 acts.

[CV75]

Just now, ttribe said:

 

I am not engaging in hyperbole.

From the Order -

"36. As a result of the conduct described above, Ensign Peak violated Section 13(f)(1) of
the Exchange Act and Rule 13f-1 thereunder by failing to file Forms 13F in Ensign Peak’s name.
Ensign Peak also violated Section 13(f)(1) of the Exchange Act and Rule 13f-1 thereunder by
filing misstated Forms 13F in the names of LLCs created for the sole purpose of filing Forms 13F."

The violation is both the law and a rule.

That is but an allegation. 

[Teancum]

16 hours ago, bluebell said:

If the SEC believed that they were not intentionally deceiving but had accidentally don't so, would the charge still likely have been one of 'misstated' filings?  Or would that be called something else?

Sorry if that seems like I want you to read minds.  I'm trying to figure out if the SEC differentiates between when it finds someone has intentionally been deceptive or was accidentally in the wrong.

Because "misstated" is pretty ambiguous considered some of the charges that I've seen them hand out where they did not mince words.

What you do not seem to grasp is there is a give an take in some of these cases. The SEC likely would have been more heavy handed in this case had the Church tried to fight.  But the Church likely saw the writing on the wall and gave up $5 milion for it not to go further and for the SEC to use "nicer" language.  

Why do you think the Church set up these LLCs?  

[ttribe]

Just now, CV75 said:

That is but an allegation. 

No, it is a finding of the Commission. I've discussed this already, above.

[CV75]

Just now, ttribe said:

No, it is a finding of the Commission. I've discussed this already, above.

OK so it's just a finding, part of the allegation.

[ttribe]

Just now, CV75 said:

OK so it's just a finding, part of the allegation.

The Church agreed to this Order which states it violated securities law. Not an allegation.