Church fined by SEC

[Teancum]

1 minute ago, smac97 said:

The SEC has presented allegations against the Church and the EPA.  These allegations have only been asserted, not demonstrated.  They have only been published, not proven.  As far as I can tell, there has not been any adjudicative proceeding.  No Due Process.  No impartial weighing of evidence, or findings of fact, or conclusions of law.

Meanwhile, the Church has - per the SEC document - neither admitted nor denied any of the allegations.

That seems to be the state of things.  Again, I get that you really want to stick it to the Church.  You really want to be able to triumphally declare its moral cravenness as established by the SEC.  Alas, however, the SEC's unsubstantiated, untested, unproven say-so will not carry the day.

SEC actions are not court proceedings unless the one charged wants to litigate.  Do you think the church would have paid the $5 million fine if they thought they would prevail?  It may be  chump change compared to the EPA funds but it is still $5 million and the press is also pretty bad.  As an attorney I have to think you know how such things work.

[smac97]

35 minutes ago, bluebell said:

Is it unusual then that the SEC refers to the allegations as facts?

No.  A plaintiff filing a complaint will include in it a "Statement of Facts," yet everybody in the process knows that these are facts as alleged by one party in the dispute, that they are intended to be established as "facts" in the future, through the adjudicative process. 

Thanks,

-Smac

[california boy]

46 minutes ago, SteveO said:

You guys…

 

*facepalm*
 

I’m just saying…when I leave the church, it won’t be over an SEC violation

No probably not.  It wouldn't have caused me to leave the Church either.  But it may very well be that something may affect you personally where you do loose trust.  And you will find that these issues that seem to regularly pop up are a pattern of not being honest that continually confirm why you left.

In this case that is being discussed, I am seeing defense of the Church for behavior that is clearly pretty shady as if the Church did nothing wrong at all and should be expected behavior of the Church leaders.  That is a bit disturbing from my point of view.

Edited February 23, 2023 by california boy

[The Nehor]

1 hour ago, CV75 said:

I feel this. Life is tough when you have to conceal from everyone that you are secretly a dragon.

I admire her bravery to be so open about it.

[smac97]

4 minutes ago, Teancum said:

Quote

The SEC has presented allegations against the Church and the EPA.  These allegations have only been asserted, not demonstrated.  They have only been published, not proven.  As far as I can tell, there has not been any adjudicative proceeding.  No Due Process.  No impartial weighing of evidence, or findings of fact, or conclusions of law.

Meanwhile, the Church has - per the SEC document - neither admitted nor denied any of the allegations.

That seems to be the state of things.  Again, I get that you really want to stick it to the Church.  You really want to be able to triumphally declare its moral cravenness as established by the SEC.  Alas, however, the SEC's unsubstantiated, untested, unproven say-so will not carry the day.

SEC actions are not court proceedings unless the one charged wants to litigate. 

Yes, that is my understanding as well.

So can we dispense with the claims that the SEC document establishes "the facts" of what happened?  

4 minutes ago, Teancum said:

Do you think the church would have paid the $5 million fine if they thought they would prevail? 

Your lack of legal training and experience is on display here.

The answer is . . . yes or maybe.  See, e.g., here (from the comments section of Sam Brunson's article) (emphases added) :

Quote

1. Brian says:

   February 22, 2023 at 12:37 pm

   I’m a securities lawyer, though haven’t ever dealt with Forms 13F specifically. A few points on this:

   1) As I see it, it’s difficult to know what culpability Church leaders have in this situation. As others have said, and I second, the securities laws are quite complex. If Church leaders desired to maintain privacy while also giving the disclosure that is required under law, they may have thought that they accomplished both goals by setting up the LLCs. As I understand it, those LLCs reported all the holdings that were required to be reported, but did so in a way that didn’t tie them to the Church. It’s not an illegitimate goal to maintain privacy of financial information. It is possible that they intended to comply and thought that they were complying. It’s also possible that they knew they were in a gray area or pushing over the line and yet decided to take the risk. I don’t believe enough information is available publicly to fully evaluate this question.

   2) What most people do not appreciate is that the securities laws and rules are a very complex web of statute, regulation, practice, and enforcement where interpretation in many instances is unclear or highly ambiguous. Even those who intend to comply fully with the securities laws and regulations can find themselves in trouble without meaning to.

   In addition, and I can’t emphasize this enough, the SEC’s enforcement arm is likely to take the most aggressive reading of any particular statute or regulation while others may take a significantly different view. Over the years, the SEC has been defeated in a number of enforcement actions when its interpretations have been challenged in court. The SEC’s interpretations of statutes and regulations are not law.

   However, a party under investigation may choose to settle, even believing that they have the better argument, because the consequences of fighting the SEC can be catastrophic, both in terms of time and money lost, impact to reputation (even if you win), and the fact that litigation can be a huge gamble with devastating penalties if you end up with the wrong judge or jury. I’m not saying that is the case here – I don’t know – but without having more information, I am saying it is plausible.

   I’m a securities lawyer and I think defendants in securities law trials are at an even worse disadvantage in securities law cases than they would be in other cases. The securities statutes and regulations in many cases are vague and difficult even for securities lawyers to parse and fully appreciate and understand, let alone someone who doesn’t have expertise in the subject. A defendant in a securities law matter would have very justifiable concerns that the defendant would not receive a fair trial.

   3) If full public disclosure of the Church’s securities holdings was made (and I understand that such disclosure was made), it is difficult for me to see any “victims” in this situation. Would love to hear Sam or others articulate in more detail who the victims were in this situation rather than some vague “people were harmed” standard. I’d wager that the average investor doesn’t look at Forms 13F. For institutional investors, the large data services would have picked up on the individual 13F filings that the church made and would note that X% of Apple was held by institutional investors and provide a breakdown of who held it. Yes, they wouldn’t have known that the Church held the stock, but is that material to their decision to invest in Apple or some other company? Doubt it.

   4) Yes, of course, it’s really unfortunate to see the Church get dragged through this. I certainly think it’s regrettable and wish they had chosen a different path to comply with the 13F rules. But as some grand lesson on hypocrisy and moral culpability, I’m not really buying it.

Parties who feel they can prevail at the end of the litigation process will often nevertheless often settle as a means of avoiding the risks and uncertainties, and the expenditures of time, effort and money, of the litigation process.

4 minutes ago, Teancum said:

It may be  chump change compared to the EPA funds but it is still $5 million and the press is also pretty bad.  As an attorney I have to think you know how such things work.

I do.  Most folks in this thread, however, do not.  This is particularly so for the folks who are pronouncing broad conclusory denigrations against the Church (Analytics, take a bow).

The law is a very complex beastie.  I make no claims to being proficient in all of it.  But I have spent 19 years practicing in state and federal courts, in civil matters which often touch on complex federal regulations.  For example, I am presently involved in what started out as a fairly straightforward civil lawsuit filed in state court to remove a lien from the title to my client's real property.  As it turns out, the party who recorded the lien has a contract, or else operates under a contract, with the federal government, which technically makes it a "federal" employee.  Federal employees and agencies cannot, as a general rule, be sued due to "sovereign immunity."  However, there are some limited exceptions to sovereign immunity, most of them under the "Federal Tort Claims Act" (the "FTCA").  However, the FTCA does not apply to certain torts, such as "slander."  My client sued about a wrongful lien, so the question is whether a "slander" claim includes "slander of title," and whether "slander of title" includes "wrongful lien" claims.  This is a pretty obscure are largely unexplored point of law.

Anyhoo, the case was removed (transferred) to federal court, ostensibly on alternative "immunity" grounds (the company that recorded the lien is owned by a Native American tribe).  The federal court transferred it back to state court after finding there was no "federal" jurisdiction.  Then we had a hearing last May, followed by three appeals to the Utah Court of Appeals, all of which failed.  Then the U.S. Attorney stepped in and transferred the case again to federal court, this time arguing that the FTCA applies and claiming the case must be dismissed.  I filed a motion to remand (transfer back) the case back to state court.  We had a hearing on these competing motions a few weeks ago and we are waiting for the judge's decision.  How will it turn out?  Hard to say.  I would wager even money.  I have some pretty solid arguments, but so does the United States.  Again the law is a complex beastie.

I have been involved in several hundred lawsuits at this point in my career.  That experience is materially informing my approach to and perspective on and assessment of what the SEC has done.  The "procedure" elements of this story matter.  A lot.  A lot.  The SEC rattled its saber and published some allegations.  The Church, without either admitting or denying those allegations, agreed to settle the matter by paying fines totaling $6 million.  A lot of money to you and me, but as a percentage of the "Assets Under Management" by EPA, or of the other assets owned or controlled by the Church, it's a fairly small amount.  Paying the fines does not come with any admission of liability or wrongdoing.  Paying the fines allows the Church to avoid the risks and uncertainties, and the expenditures of time, effort and money, of the litigation process.

This happens all the time, including in situations where the settling party thinks it has done nothing wrong, or else that what it has done wrong is minor or is being blown out of proportion.  

Critics and others hostile to the Church really want this story to be "established" as fact.  They want the SEC's unproven and untested factual allegations to be construed as etched-in-stone fact.  That is an unwarranted and rather giant leap in reasoning and evidence, and one contravened by the SEC document itself.

Thanks,

-Smac

[SeekingUnderstanding]

This conversation about facts vs allegations is hilarious to me. All of the details contained in the SEC order must have come from the church as there is no other way for the SEC to have obtained the information. For example, fact 34:

Quote

After the website reported this information, two Business Managers resigned their roles, voicing concerns about what they had been asked to do. Rather than changing the LLC Structure, two new Business Managers were assigned to replace the two who resigned.

Is anyone here saying this is in dispute? That the church doesn’t know this to be true? If it wasn’t true, the church could have merely produced the business managers in question no? What exactly about this could possibly be in dispute!?

Or what about fact 32:

Quote

The Church and Ensign Peak continued to take the same approach to filing Forms 13F through the Clone LLCs despite two Church Audit Department (“CAD”) internal audits of Ensign Peak – one in 2014 and one in 2017—that reviewed the LLC Structure. In discussions with Ensign Peak’s senior management, although CAD did not recommend specific changes to the LLC Structure, CAD highlighted the risk that the SEC might disagree with the approach.

Are anyone here really trying to say this didn’t happen? That the SEC is just making up the fact that the church audit department highlighted the risk associated with this? That despite knowing the statement wasn’t true the SEC went ahead and stated it anyway? Where did the sec get the bogus information!?

[smac97]

On 2/22/2023 at 5:55 PM, Teancum said:

Quote

Meh.  Continue your arbitrary and ad hoc demands about what the Church should due re: its private information, all the while excusing yourself from complying with those demands.

"Rules for thee, but not for me" once again rears its unsightly visage.

Once again counselor, I don't manage an investment fund that has billions of $ of assets

Once again, you are fabricating expectations out of thin air, applying them to the Church, and griping when it fails to hop to.

On 2/22/2023 at 5:55 PM, Teancum said:

that has an obligation to disclose such things to the SEC. 

Once again, there is no meaningful indication that the Church improperly "hid" anything, that it engaged in any fraudulent behavior, and so on.  Instead, it sought and obtained, and then acted on, legal advice as to a course of action that the SEC has, decades later, asserted to be problematic.

And it may well be that the SEC has exceeded the scope of the statute, and has charged the Church with violating a statute when the violation is instead related to a embellishment added to the statutory text by the SEC (see here).  If so, then the legal advice the Church received may well have been accurate.

On 2/22/2023 at 5:55 PM, Teancum said:

But here is what I do disclose.  I hold security licenses.  And I disclose my investments to FINRA.  I disclose if I am a trustee of a trust or an executor of an estate to FINRA.  And I disclose other items on a Form U-4. As required by law.  So there you have it. 

Excellent.

But what is some self-appointed critic of your fine self comes along as says "Not good enough.  I want more.  In the interests of 'transparency' as I arbitrarily define it and apply to you, whom I dislike with a burning intensity"?

Would you take that demand seriously?

On 2/22/2023 at 5:55 PM, Teancum said:

I have no reason to disclose my finances to you, or the public. 

I know.  That is my point.  And without any such reason or obligation, I don't expect you to.  And your nondisclosure is not fairly characterized as "hiding" your finances.

Now, if you could set aside your hostility against a religious minority long enough to apply these same general precepts to it, that would be awesome.

On 2/22/2023 at 5:55 PM, Teancum said:

But the EPA fund of the church did and does. 

Way too facile, this.

The Church is now years into its full compliance with what the SEC wants it to do.  And that does not include the various arbitrary and hostile and endless demands for "more" from self-appointed faultfinders who are long predisposed to dislike and speak against and assume the worst about the Church of Jesus Christ of Latter-day Saints.

On 2/22/2023 at 5:55 PM, Teancum said:

I am sure you understand the difference but go ahead and continue to be obtuse with your specious argument.

As long as folks like you persist in fabricating stupid and arbitrary and ad hoc requirements and expectations about the Church, and then grouse when those requirements and expectations are not met, I will continue to hold up a mirror to reflect your contrived and hackneyed banalities right back at ya.

Thanks,

-Smac

Edited January 29 by smac97

[Analytics]

53 minutes ago, smac97 said:

No.  A plaintiff filing a complaint will include in it a "Statement of Facts," yet everybody in the process knows that these are facts as alleged by one party in the dispute, that they are intended to be established as "facts" in the future, through the adjudicative process. 

Thanks,

-Smac

You are making yourself look quite provincial and for the sake of your own credibility, you really ought to stop. An SEC investigation and subsequent order is a completely different animal than the court proceedings you deal with in Utah County.

Here is what happened. The SEC reached out to the Church and said it was concerned with some things and was opening an investigation. The Church responded in the same way all large, sophisticated organizations do: it said that it always endeavors to comply with the law and will cooperate with the investigation completely to clarify any misunderstandings and rectify anything that it had done wrong. Subsequently there was a long and detailed investigation in which the Church and its attorneys participated. The SEC kept the Church informed about what it was finding out and the conclusions it was coming to. The Church had endless opportunities to respond, and actively participated in the investigation. The SEC sincerely wanted the Church's side of the story so that it could get the facts right, and it did get the Church's side of the story. Throughout the multi-year investigation, the Church had its days (read years), in court.

At the end of this long, detailed process where the SEC was in fact the prosecutor, judge, and jury, it came to the conclusions about the facts, and stated those facts in the order. By paying the fine and choosing not to fight this, the Church is implicitly agreeing that the facts are in fact the facts. It's somewhere between a guilty plea and a no-contest plea. The SEC order isn't a plaintiff making an allegation--it is the judge ruling on what actually happened, and the defendant deciding to take its lumps, accept the verdict, and not appeal. 

Yes, they threw the Church a bone by allowing it to pay the fine without admitting or denying any wrongdoing, but that is just a convenience the SEC gives guilty parties so that they can save some face and put the matter to rest amicably. 

Edited February 23, 2023 by Analytics

[SeekingUnderstanding]

5 minutes ago, Analytics said:

You are making yourself look quite provincial and for the sake of your own credibility, you really ought to stop. An SEC investigation and subsequent order is a completely different animal than the court proceedings you deal with in Utah County.

Here is what happened. The SEC reached out to the Church and said it was concerned with some things and was opening an investigation. The Church responded in the same way all large, sophisticated organizations do: it said that it always endeavors to comply with the law and will cooperate with the investigation completely to clarify any misunderstandings and rectify anything that it had done wrong. Subsequently there was a long and detailed investigation in which the Church and its attorneys participated. The SEC kept the Church informed about what it was finding out and the conclusions it was coming to. The Church had endless opportunities to respond, and actively participated in the investigation. The SEC sincerely wanted the Church's side of the story so that it could get the facts right, and it did get the Church's side of the story. Throughout the multi-year investigation, the Church had its days (read years), in court.

At the end of this long, detailed process where the SEC was in fact the prosecutor, judge, and jury, it came to the conclusions about the facts, and stated those facts in the order. By paying the fine and choosing not to fight this, the Church is implicitly agreeing that the facts are in fact the facts. It's somewhere between a guilty plea and a no-contest plea. The SEC order isn't a plaintiff making an allegation--it is the judge ruling on what actually happened, and the defendant deciding to take its lumps, accept the verdict, and not appeal. 

Yes, they threw the Church a bone by allowing it to pay the fine without admitting or denying any wrongdoing, but that is just a convenience the SEC gives guilty parties so that they can save some face and put the matter to rest amicably. 

I had the opportunity to work on a few consent decrees with the EPA and this is the exact process. 

[smac97]

On 2/22/2023 at 6:38 PM, SeekingUnderstanding said:

This conversation about facts vs allegations is hilarious to me.

That you find the distinction "hilarious" is, itself, hilarious.

On 2/22/2023 at 6:38 PM, SeekingUnderstanding said:

All of the details contained in the SEC order must have come from the church as there is no other way for the SEC to have obtained the information.

Ah.  "Must have come from..."

That's they way legal disputes are handled, is it?  No need for Due Process?  No need for an impartial factfinder?  No need for the submission and weighing of competent, admissible, probative evidence?

On 2/22/2023 at 6:38 PM, SeekingUnderstanding said:

For example, fact 34:

Is anyone here saying this is in dispute?

Fact 34 is merely alleged.  The Church has not admitted this allegation, and the SEC has not proven it.  

I think it's fair to say that an allegation that has been neither admitted by the opposing party nor proven via an adjudicative process is "in dispute."

On 2/22/2023 at 6:38 PM, SeekingUnderstanding said:

That the church doesn’t know this to be true?

The Church has neither admitted nor denied it or any of the SEC's other "findings."

On 2/22/2023 at 6:38 PM, SeekingUnderstanding said:

If it wasn’t true, the church could have merely produced the business managers in question no?

What the Church "could have" done is neither here nor there.  

On 2/22/2023 at 6:38 PM, SeekingUnderstanding said:

What exactly about this could possibly be in dispute!?

What exactly about this could possibly not be in dispute?

On 2/22/2023 at 6:38 PM, SeekingUnderstanding said:

Or what about fact 32:

Are anyone here really trying to say this didn’t happen?

I am saying that the Church has neither admitted nor denied it, and that the SEC has merely asserted - rather than proven - it.

I am also saying that the matter has been fully resolved, so the "facts" will remain unsettled (which, given the resolution of the matter, is more accurate than saying they are "in dispute").

On 2/22/2023 at 6:38 PM, SeekingUnderstanding said:

That the SEC is just making up the fact that the church audit department highlighted the risk associated with this?  That despite knowing the statement wasn’t true the SEC went ahead and stated it anyway? Where did the sec get the bogus information!?

Your lack of legal training and experience is showing here.

Here is what I think: You despise the Church.  You want it to look terrible.  You want to have talking points to use to rail against it.  You want to treat the allegations of the Church as established "facts."  

I am saying that this is not the way unadjudicated legal disputes work, not really.  I ask that you give this some thought.  For example, let's say that I file a lawsuit against you.  In the complaint I include all sorts of serious factual allegations as to your conduct, your character, your honesty, and so on.  You then decide to settle the case, which therefore is never adjudicated.  No Due Process.  No submission and weighing of competent, admissible evidence.

In that circumstance, do you think it would be reasonable for me to go around pronouncing you guilty/culpable of the things I had itemized in the complaint I filed against you? 

• "SeekingUnderstanding trying to differentiate 'facts' vs. 'allegations' is hilarious to me."
• "All of the details contained in Complaint must have come from SeekingUnderstanding as there is no other way for Spencer to have obtained the information."
• "Is anyone here saying the allegations in Spencer's Complaint against SeekingUnderstanding is in dispute?  That SeekingUnderstanding doesn't know those allegations to be true?"
• "If the allegations weren't true, SeekingUnderstanding could have merely denied them and presented countervailing evidence, no?"
• "What exactly about Spencer's Complaint against SeekingUnderstanding could possibly be in dispute!?"
• "Are anyone here really trying to say that what Spencer said about SeekingUnderstanding didn’t happen?  That Spencer is just making up or mischaracterizing or embellishing the facts he has alleged against SeekingUnderstanding?"

Under the Constitution, a party accused of misconduct is entitled to certain protections (such as Due Process, a right to trial, evidentiary requirements, etc.) and assumptions (such as innocent until proven guilty/culpable).

Because of your wanton hostility against the Church, you don't care about any of this.  You just want the Church to look bad, so you don't care about Due Process, or evidence, or the presumption of innocence, or anything else.  If someone says something bad about the Church, then the allegation, for you, becomes established fact.  Guilty by allegation alone.  That is what you are doing here.  And it's about as unamerican as you can get.  And also profoundly ignorant of how the U.S. legal system works.

That's my assessment.  YMMV.

What we have here are allegations in a legal dispute.  These allegations have not been adjudicated via the submission and trying of evidence and argument to am impartial factfinder acting under the rubrics of Due Process and other constitutional protections.  The case has now been settled, with no admissions by the Church and no adjudicative vindication of the SEC's claims.  So the SEC's allegations remain just that.  Claims which have not been proven to be true.

Now, you are at liberty to draw conclusions based on a single one-sided document from a regulatory agency of the State.  And given your hostility to the Church, those conclusions are understandably going to paint the Church in the worst possible light.  In other words, it's a Wednesday, and "SeekingUnderstanding" is once again demonstrating the irony of his handle.

What I think you cannot do, however, is claim that the unsubstantiated and untested and unadjudicated allegations by the SEC are established "fact."  They ain't.  And given that the matter has been settled, the precise factual contours of what happened will likely never be fully known.

Thanks,

-Smac

Edited January 29 by smac97

[SeekingUnderstanding]

18 minutes ago, smac97 said:

Your lack of legal training and experience is showing here.

Exactly how many cases have you worked on that involve government agencies? I’ve done three. Now your turn. 
 

ETA: In each consent decree, each of which takes years to negotiate with language approved by both parties, there were facts. Facts which were not disputed. And then there were violations. The violations were disagreements. The EPA interpreted the facts as violations of the clean air act and the company disagreed. Despite that each contained language like “without the adjudication or admission of any issue of fact or law except as provided in Section II (Jurisdiction and Venue),”

Edited February 23, 2023 by SeekingUnderstanding

[bluebell]

26 minutes ago, Analytics said:

On another level, it is an act of intense cynicism towards any reasonable standard of professionalism and integrity.

It might be.  Or it might not be.  I don't know enough about this field to know if most professionals view the EP's actions as reasonable and ethical or not.   

I mean, I speed but I also consider myself a person with integrity.  Other people who would never speed would probably disagree with me on that, but most drivers probably do and feel similarly.

That doesn't have any bearing on whether or not I'm actually a person of integrity but it could have a bearing on whether or not others would judge my actions as reasonable for driver and my level of integrity suspect.

Different fields have different 'normal' ways of skirting laws.  It could be that what the EP did was way outside of that 'normal lawlessness' lane, or it could be that what they did is as normal for businesses to do as speeding is for most drivers.

I wish I had enough knowledge and information to be able to judge which one was more likely.  Maybe more will be forthcoming.

[Bill “Papa” Lee]

On 2/21/2023 at 12:25 PM, Calm said:

Also 

https://www.deseret.com/u-s-world/2023/2/21/23602967/church-settles-case-with-sec-over-financial-reporting

I would love if whoever made this decision came clean on the reasoning, apologized and it was made clear (as in shared company policy) that is wasn’t going to happen again….I don’t see that as likely though.  

My guess about the Church put too much Faith, if professional “Money Handlers”. Something prohibited by scripture. 

[Analytics]

5 minutes ago, bluebell said:

It might be.  Or it might not be.  I don't know enough about this field to know if most professionals view the EP's actions as reasonable and ethical or not.   

I mean, I speed but I also consider myself a person with integrity.  Other people who would never speed would probably disagree with me on that, but most drivers probably do and feel similarly.

That doesn't have any bearing on whether or not I'm actually a person of integrity but it could have a bearing on whether or not others would judge my actions as reasonable for driver and my level of integrity suspect.

Different fields have different 'normal' ways of skirting laws.  It could be that what the EP did was way outside of that 'normal lawlessness' lane, or it could be that what they did is as normal for businesses to do as speeding is for most drivers.

I wish I had enough knowledge and information to be able to judge which one was more likely.  Maybe more will be forthcoming.

It’s up for you to decide for yourself, of course. But from my perspective, there is a difference between, say, agreeing to a 200-page licensing agreement for an app on your phone without reading it, and knowingly lying about a material something under oath.

A minor traffic violation is in fact a minor, inconsequential thing. In contrast, deliberately filing materially false statements with the SEC is something different. I share the sensibilities of the SEC as articulated in their Order. If somebody thinks “lying for the Lord” is a higher ethical standard, that’s up to them, but they shouldn’t be surprised when the SEC comes down on them anyway.

[bluebell]

14 minutes ago, Analytics said:

It’s up for you to decide for yourself, of course. But from my perspective, there is a difference between, say, agreeing to a 200-page licensing agreement for an app on your phone without reading it, and knowingly lying about a material something under oath.

A minor traffic violation is in fact a minor, inconsequential thing. In contrast, deliberately filing materially false statements with the SEC is something different. I share the sensibilities of the SEC as articulated in their Order. If somebody thinks “lying for the Lord” is a higher ethical standard, that’s up to them, but they shouldn’t be surprised when the SEC comes down on them anyway.

If the findings of the SEC amount to the equivalent of a minor traffic violation, then we aren't really contrasting anything. Both are equal in their sphere.  I keep hearing a lot of people claiming that the offense of the EP is minor and a lot of people claiming that it's not.  The problem from my perspective is that I can't really show that either group actually knows what they are talking about.

So in that regards it's a bit of a wash.

To say that you share the sensibilities of the SEC could be equal to saying that you share the sensibilities of the cop who gave someone a ticket for speeding.  That's very valid.  But not everyone reacts to seeing other people getting tickets in a similar manner.  

And sometimes how we react to someone else getting a ticket depends on how we feel about the person getting one, and not so much how we feel about the law or the cop who gave it.

 

[SeekingUnderstanding]

3 minutes ago, bluebell said:

I keep hearing a lot of people claiming that the offense of the EP is minor and a lot of people claiming that it's not. 

From the perspective of this critic, the actual offense is minor. The same setup *could have been a major offense *if they actually used the shell companies in a coordinated way to manipulate the market. My complaints have nothing to do with the reporting and everything to do with the fact that the church favors secrecy and obfuscation so much that it used a regulatory risky framework to maintain it. It’s *my moral judgement that all non profit organizations should be open and transparent in 100 percent of their financial transactions. 

[2BizE]

A very good and thorough article by Sam Brunson:

https://bycommonconsent.com/2023/02/21/the-church-the-investment-advisor-and-the-sec/#more-120243

[Analytics]

9 minutes ago, bluebell said:

If the findings of the SEC amount to the equivalent of a minor traffic violation, then we aren't really contrasting anything. Both are equal in their sphere.  I keep hearing a lot of people claiming that the offense of the EP is minor and a lot of people claiming that it's not.  The problem from my perspective is that I can't really show that either group actually knows what they are talking about.

So in that regards it's a bit of a wash.

To say that you share the sensibilities of the SEC could be equal to saying that you share the sensibilities of the cop who gave someone a ticket for speeding.  That's very valid.  But not everyone reacts to seeing other people getting tickets in a similar manner.  

And sometimes how we react to someone else getting a ticket depends on how we feel about the person getting one, and not so much how we feel about the law or the cop who gave it.

 

I don’t think comparing it to a speeding ticket of any gravity is a useful analogy. Everybody speeds to some extent at least occasionally. It’s normal.

In contrast, the Securities and Exchange act is serious legislation that everyone MUST comply with all the time. Full stop. Nobody with big portfolios likes announcing to the world what assets they hold. But they all do it because it is an important law. Filing dishonest reports to avoid legal compliance on this is a big deal. 

[bluebell]

16 minutes ago, SeekingUnderstanding said:

From the perspective of this critic, the actual offense is minor. The same setup *could have been a major offense *if they actually used the shell companies in a coordinated way to manipulate the market. My complaints have nothing to do with the reporting and everything to do with the fact that the church favors secrecy and obfuscation so much that it used a regulatory risky framework to maintain it. It’s *my moral judgement that all non profit organizations should be open and transparent in 100 percent of their financial transactions. 

Valid.

[bluebell]

6 minutes ago, Analytics said:

In contrast, the Securities and Exchange act is serious legislation that everyone MUST comply with all the time. Full stop. Nobody with big portfolios likes announcing to the world what assets they hold. But they all do it because it is an important law. Filing dishonest reports to avoid legal compliance on this is a big deal. 

The speed limit is also a law that everyone must comply with all the time or get fined. It's just that most drivers are willing to risk it because they do view it as so minor.

I have no idea if that is similar to how investment firms view this kind of infraction. It's a law, but the 'is a big deal' part I can't confirm anywhere.  You might be right.  Or not. 

[Bernard Gui]

On 2/21/2023 at 1:42 PM, ksfisher said:

I deal with motor carrier regulations all the time.  The book that the federal government publishes is around 600 pages.  2/3 of this is the actual regulations, 1/3 is guidance to interpret the regulations.  When a driver is inspected at a port of entry one inspector may interpret a regulation in one manner, another in a different way.  If they want to find something wrong they can always interpret something in a way so they can find something wrong.

If tax law is anything like this (and my impression is that it's worse) I don't see how even the best legal advice and second opinions will always be 100% correct.

I have gone to two IRS offices with a question about taxes and received contradictory answers. 

[Analytics]

9 minutes ago, bluebell said:

The speed limit is also a law that everyone must comply with all the time or get fined. It's just that most drivers are willing to risk it because they do view it as so minor.

I have no idea if that is similar to how investment firms view this kind of infraction. It's a law, but the 'is a big deal' part I can't confirm anywhere.  You might be right.  Or not. 

Speeding and deliberately lying on SEC reports aren’t comparable. If you go 5 over, cops will usually let you go by because everyone is driving that fast. If you deliberately lie on an SEC filing and the SEC finds out, a multi-million dollar investigation will ensue. Every. Single. Time.

[JustAnAustralian]

5 minutes ago, Analytics said:

Speeding and deliberately lying on SEC reports aren’t comparable. If you go 5 over, cops will usually let you go by because everyone is driving that fast. If you deliberately lie on an SEC filing and the SEC finds out, a multi-million dollar investigation will ensue. Every. Single. Time.

Isn't that a matter of enforcement though? If the SEC decided they wouldn't go after religion-linked organisations, would it suddenly be ok?

[Thinking]

 

Quote

The SEC’s order finds that, from 1997 through 2019, Ensign Peak failed to file Forms 13F, the forms on which investment managers are required to disclose the value of certain securities they manage. According to the order, the Church was concerned that disclosure of its portfolio, which by 2018 grew to approximately $32 billion, would lead to negative consequences. To obscure the amount of the Church’s portfolio, and with the Church’s knowledge and approval, Ensign Peak created thirteen shell LLCs, ostensibly with locations throughout the U.S., and filed Forms 13F in the names of these LLCs rather than in Ensign Peak’s name. The order finds that Ensign Peak maintained investment discretion over all relevant securities, that it controlled the shell companies, and that it directed nominee “business managers,” most of whom were employed by the Church, to sign the Commission filings. The shell LLCs’ Forms 13F misstated, among other things, that the LLCs had sole investment and voting discretion over the securities. In reality, the SEC’s order finds, Ensign Peak retained control over all investment and voting decisions.

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

Emphasis Mine.

The left hand definitely knew what the right hand was doing. What are the words to the popular hymn sung frequently at LDS worship services? "Do what is right, let the consequence follow." The Church's fear of negative consequences led to this whole mess. Now the consequences are more negative than what the Church was afraid of in the first place.

Cue Alanis Morissette.

Edited February 23, 2023 by Thinking

[Analytics]

7 minutes ago, JustAnAustralian said:

Isn't that a matter of enforcement though? If the SEC decided they wouldn't go after religion-linked organisations, would it suddenly be ok?

I don’t think the SEC has the discretion to give special favors like that. Nobody likes complying, but everyone has to.