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Church fined by SEC


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Posted
5 hours ago, Calm said:

I consider myself a defender of the Church.  Card carrying, dues paying FAIR apologist even.  

Does my position get included in the above?

I inserted "some" in front of "defenders." Thanks.

Posted
5 hours ago, pogi said:

Is that really how you judge ttribe to be?  Guilty of perverted  malice and condescension?

Condescension, yes.  Perverted malice?  I don't think I made that accusation or anything akin to it, but if you can show me exactly what you're talking about, and if I agree with you, I'll consider retracting it.  However, since I don't know what you mean ... :unknw: 

5 hours ago, pogi said:

Kind of ironic given your position of non-judgment and presumed innocence.

Okay.  I don't see the irony, but, okay.

5 hours ago, pogi said:

  His point seemed innocent and valid to me.  I guess we must each judge for ourselves, no?  Isn’t that how this life is supposed to work?

In some cases (perhaps in many cases), I suppose so.  In others, most decidedly not.  While reasonable minds may be able to disagree in many cases, I don't think life would work very well if we all carried around our own set of personal values, mores, assumptions, and presuppositions.  I might think it is stupid that a light was installed at a certain intersection that, previously, was uncontrolled, but I had better obey that light even though, personally, I might question its utility.  Doing otherwise portends potentially disastrous consequences.

5 hours ago, pogi said:

The presumption of innocence operates in our courts of law to protect people charged with crimes from the overwhelming power of the state to deprive them of their liberty.  It does not operate to immunize the church or other powerful organizations/people in positions of trust from public scrutiny on matters of trust and wrong-doing. 

Okay.  As a matter of general principle, I agree, I suppose, but who decides who is too powerful (or, conversely, who decides whose interests are not weighty enough to merit the presumption of innocence?  See my post immediately previous to this one) to merit protection?

5 hours ago, pogi said:

It is a legal procedural protection, not a moral operative.  (Please don’t feel tempted to slaughter scripture after reading that.)

You, and anyone else who never has been railroaded in such a proceeding, can afford to say that.  In the vast majority of cases, the administrative state functions quietly in the background, behind the scenes, perhaps not having much impact on the day-to-day lives of most citizens and inhabitants ...  Or ... perhaps not.  How much is any given regulation really needed to protect us?  Is there a line beyond which the state, however good its intentions might be, should not be permitted to go?  Does the mere fact that the state's intentions are pure and noble justify any particular intervention?

5 hours ago, pogi said:

If I was to withhold personal scrutiny of all people and organizations in all matters that they have not been convicted of in a court of law, then I would be easily victimized.  No thanks.

I agree that the administrative state should function to prevent people from being victimized, but the "protections" afforded by the administrative state are not only single-edged swords, they are double-edged.  And again, are all decisions the state makes outside of the context of a formal trial res ipsa loquitur and ipso facto privileged from scrutiny?  I'm reminded of a t-shirt my mother got my father, who was a police officer at the time and now is retired: It was a picture of a hand holding a gun, and the caption read, "I'm from the government.  I'm here to help you."  While it may be true, in many cases, that the government and those acting on its behalf have the best of intentions (they intend to help), again, is that all that matters?  I don't think so.

5 hours ago, pogi said:

Imagine comic strip art with this:

“You’re late again Sam.”

”Nuh uh uh!  Presumed Innocent until proven guilty in a court of law!”

”…really?”

”Yes really! judge not lest ye be judged with the same judgment buddy boy.”

”Go home Sam”

 

Again, you can afford to ignore how the administrative state functions vis-a-vis the presumption of innocence because perhaps its affect on your day-to-day life is minimal (but perhaps it is not as minimal, on first glance, as it might seem).

Posted
14 hours ago, webbles said:

We have 20/20 hindsight to say that the SEC didn't agree with the scheme.  But, back in 1998, 2005, etc, the church leadership and EPA leadership had a goal.  That goal was to make it harder for people to determine how much investments the church really had.  They had legal consultation and came up with a solution.  They would create mini LLCs which would have control of the stocks and those mini LLCs would file the 13Fs.

Why did the church want to make it harder for people to determine what investments and how much it had?  And I wonder the value of the legal council that they received?  Perhaps Kirton and McConkie do not have the expertise on SEC matters.  The two time I was in an advisory capacity on SEC issues the local law firm did not have the expertise and worked with engaging legal council that has this specific expertise as it is a narrow area.

 

14 hours ago, webbles said:

Since the purpose of those mini LLCs was to hide their connection to the church and EPA, using names that were common makes a lot of sense. 

So you agree the church wanted to hide its assets. regarding the bolded item, sure. If you want to be sneaky and skirt the rules.  So much for honesty.  None of those signing were investment fund managers. You do understand that to be an investment fund manager one needs certain licenses and qualifications.  You know, rules they have to keep.  Having someone sign of that is not qualified is against the regulations.  You don't think EPA and legal advisors knew that?

 

14 hours ago, webbles said:

 

I don't see how that shows that EPA was intentionally trying to break the law. 

See above.

 

14 hours ago, webbles said:

 

Were they misleading? 

Are you honest in your dealings with your fellow men?

 

14 hours ago, webbles said:

 

Yes.  But I doubt they considered themselves to be breaking the law. 

Really? 

 

14 hours ago, webbles said:

 

After reading more about the 13Fs, a lot of investment managers skirt that law. 

CFR

 

14 hours ago, webbles said:

You are supposed to file the form within 45 days of the end of the quarter.  Most large managers will file it at the very last minute (and some even go after the last minute every now and then).  There was even a study that looked at 13Fs and found that they were "fraught with errors" and a "non-standardized mishmash of jumbled (and often inaccurate) information" https://corpgov.law.harvard.edu/2016/08/08/form-13f-mis-filings/

And tax returns get filed late and often have mistakes. So what?

14 hours ago, webbles said:

Hiding the church's wealth isn't necessarily a "sinister motive" or a bad thing.  We don't know the actual motive and it could easily have been multiple motives that changed over time.  When it was first done, President Hinckley was president of the church and President Burton was presiding bishop.  When they added more LLCs, President Monson was president of the church and President Stevenson was presiding bishop.  The motives at those two times could be vastly different.  Also, a year before the first LLC was done, Times had just published "Mormons, Inc".  I could see church leadership not liking that type of publicity.

I would not call it sinister either.  But the Church does seem paranoid about their finances and wealth.

Posted (edited)
8 minutes ago, Teancum said:

Why did the church want to make it harder for people to determine what investments and how much it had?

This was addressed a couple of times. One of perhaps multiple reasons is that some members would think to mimic the Church's investments because, of course, Providence would bless the Church's investments that they should not fail. If/when that error is brought into disillusion it could cause some's faith to be shaken (much as it did with the Kirtland Safety Society).

As for the Church now necessarily wanting to broadcast the extent of its fiscal holdings ... well, that should be pretty self-evident given the several threads on the topic over the past year or so. :)

Edited by Nofear
Posted (edited)
38 minutes ago, Analytics said:

The SEC has asserted that certain things in their Order are "facts." After carefully considering those allegations and everything else we know about these events, I have come to the conclusion that in this case, the things the SEC says are facts really are true. Even though the court system doesn't consider them to be facts, in the real world they are facts. That is my opinion. "Due process" is a concept for the court system. Before the court system will use the authority of the state to administer justice, there must be due process. Of course. But here in the real world, we are talking about forming correct opinions about reality and not about using the power of the state to administer justice. We should gather as much evidence as we can. We should endeavor to correctly use the normative tools of rationality when forming our opinions. But "due process" is a principle of the court system, not a principle of forming personal opinions about things.

Well, sure, anyone can claim that anything is a "fact" in their opinion. But if there isn't sufficient evidence to prove that a given person's opinion is correct, and if there isn't some sort of widespread or near-universal consensus that the given person's opinion is indeed correct, then it hardly amounts to a "fact," especially when discussing the matter with those who might disagree. 

For instance, in my opinion Joseph Smith's first vision actually happened. I consider it a "fact" (in my own personal paradigm), in the sense that I have a high level of confidence that it actually occurred in the objective world. And when I attend Church and am around other Latter-day Saints, it is also considered something like a "fact," in that it is a proposition that most everyone in our faith community agrees upon.

But in conversations on this discussion board, especially when discussing matters of faith with those who strongly disagree with my views, would it be valid or helpful for me to insist that the First Vision is a "fact" in my opinion? I suspect others would assume that I was simply trying to leverage the word "fact" to somehow bolster my opinion in a way that isn't warranted in this discussion space. 

Edited by Ryan Dahle
Posted
7 hours ago, Thinking said:

Not just a legal issue. We are discussing an ethical issue.

I don't see much, if any, of an "ethical issue" arising from the technicalities and minutiae involved in filling out 13F Forms.

I also don't see an "ethical issue" with the Church taking legal steps to maintain some measure of privacy.  YMMV.

7 hours ago, Thinking said:

Some defenders of the Church believe that the Church made honest mistakes, that it was simply following the advice of its legal and financial teams.

Yes, I think that's an accurate assessment.  

7 hours ago, Thinking said:

You have suggested that since nothing was decided in a court of law, we have no business making inferences about how much the Church was involved in the decision to create shell companies.

Well, not quite.  I have said we cannot really draw legal conclusions, nor can critics accurately claim that the SEC found that the Church violated securities laws.  We cannot say that the SEC's Order constitutes established "facts," when they are instead untested and unsubstantiated allegations.

7 hours ago, Thinking said:

"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."

That's the characterization of the SEC, yes.

There is nothing wrong with using LLCs in this way.  The issue, really, seems to be about "investment discretion" being vested, or not, in the LLC, and whether such discretion must have been "sole" (held only by the LLC).  The SEC says such vested "sole investment discretion" is a requirement, but I have some real questions about that (see here).

7 hours ago, Thinking said:

I think it's pretty clear that the Church was not just doing what its legal and financial teams told it to do.

Not only do I think that's not "pretty clear," I think the evidence largely goes the other way.

I do have some concerns about the allegations that the LLC managers were only given signature pages for the 13F Forms.  But I don't think that is a sufficient or legitimate basis for drawing broad deprecatory conclusions about the Church and its "ethics."  I also don't think we have sufficient information to speak intelligently as to the particulars of this issue.

I also have some concerns about the allegations that the 13F Forms were properly filled out.  This ties back to the above-referenced "investment discretion" issue.  If the SEC has added a gloss to the governing statute that not only is absent from the text but contradicts it, and if that gloss is the primary basis for the SEC's adverse findings, then I think that merits some attention and consideration.

7 hours ago, Thinking said:

It was involved in the decision making process.

Well, yes.  My client's are involved in "the decision making process," but they rely pretty heavily on my advice as to legal issues.

And as I have previously noted, it is possible that the legal advice that the Church received was correct, and that the SEC is wrong.

7 hours ago, Thinking said:

The absence of court proceedings does not make it so that we cannot use the available information to infer was happened.

I agree.  

Thanks,

-Smac

Posted
49 minutes ago, bluebell said:

Churches provide a lot to the community though. Last week our Stake spent $8000 to provide the local schools with food for children that don’t have enough to eat on the weekends. We do this at least once but sometimes twice a year. And that is one of multiples stakes in the town who are doing the same thing.

Though the church doesn’t take full advantage of the public schools (I’m not sure what that looks like) they do support them.

And other service projects as well.

It’s only through openness and transparency (something that is apparantly anathema to the church) that the costs and benefits to society may be known.  

Posted
1 minute ago, smac97 said:

nor can critics accurately claim that the SEC found that the Church violated securities laws

More accurately, a court of law did not find so. But the SEC (a government agency) certainly did. The fact of whether the law was broken though is immaterial to this critic though. I couldn’t care less. What this issue exposes is the lengths the church will go to be as opaque as possible. 

Posted
On 2/22/2023 at 1:40 PM, CV75 said:

Here is a Church definition, for Gospel purposes, of lying: Lying (churchofjesuschrist.org)

"Any communication of falsehood or untruth for the purpose of deception." and pertinent scriptures follow.

No such purpose is mentioned in the order: 34-96951.pdf (sec.gov)

The LDS Presidency could claim they actually didn't know (if you can believe that) how their $32bn
investment fund was managed or structured.  "Ignorance is  bliss" as some would say.  Like Alex
Murdaugh in his murder trial ... I don't recall or I don't remember it that way.  Using shell companies
is not a form of lying, but concealment is not really following the spirit of the law.

Posted
2 minutes ago, SeekingUnderstanding said:

More accurately, a court of law did not find so. But the SEC (a government agency) certainly did. The fact of whether the law was broken though is immaterial to this critic though. I couldn’t care less. What this issue exposes is the lengths the church will go to be as opaque as possible. 

I keep hearing people say they keep their assets hidden to "protect" the membership, as if knowing the truth about the church's financial situation will somehow harm church members. I don't get it. As I said, it doesn't make any difference to me what the church does, but in general, transparency is a net good in pretty much every case. When you go out of your way to obscure things, you increase the likelihood of unethical and/or illegal activity. 

Posted
Just now, smac97 said:

Educational institutions also provide a lot to the community.  Non-profit ones also don't pay property taxes, and yet nobody seems to grouse about that.

It's almost as if religious non-profits are being singled out for particular adverse treatment.

Thanks,

-Smac

Please stop this. I swear if you play the persecution card one more time, my eyes will stay permanently rolled. Give it a rest. 

Posted
2 minutes ago, jkwilliams said:

I keep hearing people say they keep their assets hidden to "protect" the membership, as if knowing the truth about the church's financial situation will somehow harm church members. I don't get it. As I said, it doesn't make any difference to me what the church does, but in general, transparency is a net good in pretty much every case. When you go out of your way to obscure things, you increase the likelihood of unethical and/or illegal activity. 

I tend to agree. The Church has done this a couple of times (e.g. church history). Tends not to turn out well in the end. The trend has been towards increased transparency and I like the trend.

Posted
1 hour ago, ksfisher said:

full possession of the facts

People here seem to say that we don’t have all the “facts”. That the SEC’s assertions of fact (like that multiple internal church audits pointed out the risk of their reporting scheme) are mere assertions. What is preventing us from getting the church’s full side of the story? Oh yeah, it’s because the church wants to maintain as much opaqueness here as possible. So, because the church “considers the matter closed” we should give them the benefit of the doubt and assume SEC’s detailed summary of events must be flawed somehow. 
 

This episode demonstrates exactly how much of a benefit of the doubt the church’s silence should be given. The church is willing to go through great lengths to obscure and hide its operations and keep their knowledge away from members and the public. 
 

@smac97 You will notice none of this scorn is directed at the legal question of whether the church would be found guilty in a court of law of violating the security and exchange act. 

Posted (edited)
23 minutes ago, smac97 said:

Educational institutions also provide a lot to the community.  Non-profit ones also don't pay property taxes, and yet nobody seems to grouse about that.

It's almost as if religious non-profits are being singled out for particular adverse treatment.

Thanks,

-Smac

All other non-profits are required to operate transparently. 

Edited by SeekingUnderstanding
Posted
5 minutes ago, SeekingUnderstanding said:

All other non-prophets are required to operate transparently. 

Was that a deliberate pun or a Freudian slip?

Posted
16 hours ago, smac97 said:

Right.  'Cuz the Brethren are all living large.

You keep telling 'em, son...

Thanks,

-Smac

Sigh... more deflection.  Nobody says this.  But it is true that the organization called The Church of Jesus Christ of Latter-day Saint has accumulated significant wealth.  But whether it is too much it not the topic of this thread.

Posted (edited)
2 hours ago, Kenngo1969 said:

The conventional wisdom is that it's okay to not apply rules of evidence and procedure, including those having their roots in the historical presumption of innocence, to non-trial proceedings because (so the reasoning, such as it is, goes) such rules are cumbersome and the matters decided in such proceedings are of lesser import that matters that are decided in civil and criminal trials.  If I can be pardoned for having the temerity to say so, I'm not so sure.

One can't apply the same rules that are applied in legal due process.  Not possible.  We are left to judge with the best evidence we have been presented from both parties.  We have to make such judgments to protect ourselves and our children from all sorts of victimization from people and institutions of power.   

2 hours ago, Kenngo1969 said:

It seems to me that the presumption of innocence ought to hold more weight in administrative proceedings before the State (and before parties or tribunals acting on the State's behalf) rather than less,

No one here is acting for the State or speaking for its behalf.  We are making conscientious judgments of who and what we believe and trust. 

2 hours ago, ksfisher said:

Right.  And I don't see how anyone, in the court of public opinion, could righteously make any sort of judgement without full possession of the facts and a complete understanding of the regulations involved and the intentions of the church.  

Legally, I agree.  But we make judgments every day without all the facts and complete understanding of situations in order to protect ourselves and determine who we can trust.  Bill Clinton said "I never inhaled".  He was never given full due process.  We don't have all the facts.  All we have to go on is the allegations and evidence presented from both sides.  We all formed our own judgment of who and what we believe and trust based on limited information.  

2 hours ago, ksfisher said:

I wasn't saying you were.  Those scriptures, however, seem to provide excellent guidance when looking at matters that we have only a portion of the understanding of.

Judge not huh?  I have heard so many make judgments in favor of the church here.  It was an "unintentional mistake" some say.  Others judge that it was based on "good motives" and "good intentions", etc.  others judge that it was not an ethical issue but a technical one.   All that judgment without all the facts is ok?  Why don't you go after them too?  This seems rather one sided and simply an attempt to shut down all scrutiny and judgments that simply disagree with favorable judgments.   It is an attempt to silence conscientious scrutiny.   We all come to our own conclusions of who and what we can trust in this case.  You just don't like that my judgments are different from yours.     

Without judgment we become door matts, and all people and institutions in positions of power and trust have full immunity from scrutiny where due process is not applicable and can take full advantage of our lack of conscientious judgment based on the evidence we have. 

2 hours ago, Kenngo1969 said:

While reasonable minds may be able to disagree in many cases, I don't think life would work very well if we all carried around our own set of personal values, mores, assumptions, and presuppositions. 

Ummm, welcome to life. 

2 hours ago, Kenngo1969 said:

I might think it is stupid that a light was installed at a certain intersection that, previously, was uncontrolled, but I had better obey that light even though, personally, I might question its utility.  Doing otherwise portends potentially disastrous consequences.

How does this apply in this case?  What law am I not obeying here that is equivalent to a new traffic light?  I am confused.   

2 hours ago, Kenngo1969 said:

Okay.  As a matter of general principle, I agree, I suppose, but who decides who is too powerful (or, conversely, who decides whose interests are not weighty enough to merit the presumption of innocence?  See my post immediately previous to this one) to merit protection?

Huh?  Presumption of innocence until proven guilty "in a court of law" DOESN'T APPLY outside of the court of law!!!  We don't just presume that every one is innocent.  I sure as hell hope we don't defer all judgment to the State in our day to day lives.   

2 hours ago, Kenngo1969 said:

You, and anyone else who never has been railroaded in such a proceeding, can afford to say that.  In the vast majority of cases, the administrative state functions quietly in the background, behind the scenes, perhaps not having much impact on the day-to-day lives of most citizens and inhabitants ...  Or ... perhaps not.  How much is any given regulation really needed to protect us?  Is there a line beyond which the state, however good its intentions might be, should not be permitted to go?  Does the mere fact that the state's intentions are pure and noble justify any particular intervention?

Non sequitur.  We are not talking about the State abusing its power here.  We are talking about people making conscientious judgments of who and what they can trust based on the best available evidence presented from both sides where one party has refused their right to due process. 

2 hours ago, Kenngo1969 said:

I agree that the administrative state should function to prevent people from being victimized, but the "protections" afforded by the administrative state are not only single-edged swords, they are double-edged.  And again, are all decisions the state makes outside of the context of a formal trial res ipsa loquitur and ipso facto privileged from scrutiny?  I'm reminded of a t-shirt my mother got my father, who was a police officer at the time and now is retired: It was a picture of a hand holding a gun, and the caption read, "I'm from the government.  I'm here to help you."  While it may be true, in many cases, that the government and those acting on its behalf have the best of intentions (they intend to help), again, is that all that matters?  I don't think so.

What?  You are off the tracks here.   Why do you keep talking about the State, when I am talking about making personal judgments and not presuming innocence jsut because one party refused their right to legal due process.  I don't believe in immunity from such scrutiny.  That is reckless and dangerous.

2 hours ago, Kenngo1969 said:

Again, you can afford to ignore how the administrative state functions vis-a-vis the presumption of innocence because perhaps its affect on your day-to-day life is minimal (but perhaps it is not as minimal, on first glance, as it might seem).

Yes, those are STATE functions.  I  AM NOT THE STATE.  It doesn't and shouldn't apply to me because I don't have the same power and ability of the state to deny a person their liberty or give full due process on every matter.

How many people here make judgments about politicians and political parties without having all the facts and without full legal due process?  

I am not proclaiming my judgments as binding or as absolute.  I am not presuming that my judgment is not fallible.  I am not presenting or attempting to establish my judgment on this issue as "facts".  I am using my judgment to decide what I believe is true based on the evidence, and thus decide who I trust.   I am honestly flabbergasted by all of the "innocent until proven guilty" and "judge not" nonsense.  WE are all making judgments of what we suspect to be true. 

Edited by pogi
Posted
46 minutes ago, Ryan Dahle said:

Well, sure, anyone can claim that anything is a "fact" in their opinion. But if there isn't sufficient evidence to prove that a given person's opinion is correct, and if there isn't some sort of widespread or near-universal consensus that the given person's opinion is indeed correct, then it hardly amounts to a "fact," especially when discussing the matter with those who might disagree. 

For instance, in my opinion Joseph Smith's first vision actually happened. I consider it a "fact" (in my own personal paradigm), in the sense that I have a high level of confidence that it actually occurred in the objective world. And when I attend Church and am around other Latter-day Saints, it is also considered something like a "fact," in that it is a proposition that most everyone in our faith community agrees upon.

But in conversations on this discussion board, especially when discussing matters of faith with those who strongly disagree with my views, would it be valid or helpful for me to insist that the First Vision is a "fact" in my opinion? I suspect others would assume that I was simply trying to leverage the word "fact" to somehow bolster my opinion in a way that isn't warranted in this discussion space. 

All fair points, but please keep this in context. The SEC claimed several things are "facts" (their word), and I explained in detail why we can be pretty confident that these "facts" really are true.

Smac's position has been (and he can correct me if I'm wrong), that there really isn't an ethical component to any of this that we need to consider, because all of the breaches in ethics that the SEC described in their "facts" are merely allegations that haven't been explicitly admitted by the Church nor adjudicated by the court system. Therefore it's impossible for onlookers to form well-grounded independent opinions about whether or not these "allegations" are true, and anybody who thinks otherwise is exceedingly ignorant about the law. Therefore there are no ethical issues to consider. Nothing to see here folks. Move along. Move along.

Posted (edited)
13 minutes ago, Analytics said:

All fair points, but please keep this in context. The SEC claimed several things are "facts" (their word), and I explained in detail why we can be pretty confident that these "facts" really are true.

Smac's position has been (and he can correct me if I'm wrong), that there really isn't an ethical component to any of this that we need to consider, because all of the breaches in ethics that the SEC described in their "facts" are merely allegations that haven't been explicitly admitted by the Church nor adjudicated by the court system. Therefore it's impossible for onlookers to form well-grounded independent opinions about whether or not these "allegations" are true, and anybody who thinks otherwise is exceedingly ignorant about the law. Therefore there are no ethical issues to consider. Nothing to see here folks. Move along. Move along.

Exactly.  There was no due process with Joseph Bishop either.  There were mere allegations.  Yet somehow Smac was able to find it within himself to make non-legal judgment (excuse me, "surmise") about issues of morality in relation to Joseph Bishop's behavior.  He voiced his opinions here freely.  Nobody faulted him or screamed "judge not" and "innocent until proven guilty"!   Why should this be different?

Edited by pogi

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