Church fined by SEC

[ksfisher]

26 minutes ago, pogi said:

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.

Sounds like church leaders have been weighed, measured, and found wanting in your eyes. 

[jkwilliams]

Just now, ksfisher said:

Sounds like church leaders have been weighed, measured, and found wanting in your eyes. 

That's another thing I don't understand. When people do things that are wrong--legally or ethically--there's nothing wrong with saying so. 

[Calm]

15 minutes ago, pogi said:

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?

Bishop’s own words convicted him, imo.  Here the Church has not shared enough to make a judgment solely on what they have said. Whether one views the SEC charges as reliable enough to judge depends on one’s view of it.  I just don’t trust anyone I don’t know well enough to believe they wouldn’t be tempted to present everything in their favor and leave out what I might view as mitigating details or possibly inflate or as the judge described it “finesse” their claims.  And given the judge’s judgment, it appears the SEC has a history with doing this at times.  

I know some feel that the Church’s agreement to the settlement means it didn’t happen this time, but some defendants agree to pleas of no contest because they don’t want to take the risk of something worse happening.  I agree it is the Church’s responsibility we don’t know more, I don’t have a problem with anyone using that as part of their judgment…or the SEC charges for that matter.  I just think given the history of “finesse” we should be cautious accepting them without reserve.

Edited February 24, 2023 by Calm

[jkwilliams]

2 minutes ago, Calm said:

Bishop’s own words convicted him, imo.  Here the Church has not shared enough to make a judgment solely on what they have said. Whether one views the SEC charges as reliable enough to judge depends on one’s view of it.  I just don’t trust anyone I don’t know well enough to believe they wouldn’t be tempted to present everything in their favor and leave out what I might view as mitigating details or possibly inflate or as the judge described it “finesse” their claims.  And given the judge’s judgment, it appears the SEC has a history with doing this at times.  

I know some feel that the Church’s agreement to the settlement means it didn’t happen this time, but some defendants agree to pleas of no contest because they don’t want to take the risk of something worse happening.  I agree it is the Church’s responsibility we don’t know more, I don’t have a problem with anyone using that as part of their judgment…or the SEC charges for that matter.  I just think given the history of “finesse” we should be cautious accepting them without reserve.

I agree with you. What is out of bounds is saying someone is "over-emotional" or "judgmental" because they do find the church's actions troubling. We can disagree without demonizing each other. 

[teddyaware]

1 hour ago, smac97 said:

A pretty good summary.  One item I think could be added is:

4. There is a legitimate question as to whether the legal advice the Church received about the reporting requirements was substantively correct, and that the SEC has added a requirement ("sole investment discretion") that A) is absent from the statutory text, B) may in fact contradict the statutory text, and C) that this contradiction is materially relevant to the SEC's adverse finding.  See here.

Thanks,

-Smac

Questions:

1) If the church’s pre-2019 manner of filing is now regarded by many as an egregious attempt at deception and obfuscation, why was the church able to file in said questionable manner from 1997 to 2019 without ever being called out on it by the SEC?

2) While some will point to the whistle blower’s more recent disclosures as the reason why the supposed “ruse” wasn’t caught sooner, nevertheless, why on earth didn’t the SEC catch such a glaringly obvious improper manner of filing for over 22 years?

3) Wouldn’t the fact that the church wasn’t called out on its putatively improper manner of filing for over 22  years likely cause the fund managers to think they were doing nothing wrong?

4) With such vast money sums of money being invested on an ongoing basis, why didn’t the SEC act prudently and do an audit to early on make sure the church was in compliance?

All this has got me wondering if some at the SEC  knew all along that the church wasn’t in technical compliance, but waited till now to spring it on the nation to embarrass the church. I wouldn’t put such cynical Machiavellian machinations beyond the lying, scheming, “gotcha culture” crooks who dominate “Foggy Bottom.”

Edited February 24, 2023 by teddyaware

[jkwilliams]

3 minutes ago, teddyaware said:

Questions:

1) If the church’s pre-2019 manner of filing is now regarded by many as an egregious attempt at deception and obfuscation, why was the church able to file in said questionable manner from 1997 to 2019 without ever being called out on it by the SEC?

2) While some will point to the whistle blower’s more recent disclosures as the reason why the supposed “ruse” wasn’t caught sooner, nevertheless, why on earth didn’t the SEC catch such a glaringly obvious improper manner of filing for over 22 years?

3) Wouldn’t the fact that the church wasn’t called out on its putatively improper manner of filing for over 22  years likely cause the fund managers to think they were doing nothing wrong?

4) With such vast money sums of money being invested on an ongoing basis, why didn’t the SEC act prudently and do an audit to early on make sure the church was in compliance?

All this has got me wondering if some at the SEC  knew all along that the church wasn’t in technical compliance, but waited till now to spring it on the nation to embarrass the church. I wouldn’t put such cynical Machiavellian machinations beyond the lying, scheming, “gotcha culture” crooks who dominate “Foggy Bottom.”

How would the SEC have discovered it? How would they have determined that shell managers aren't actually engaged in managing accounts? 

[pogi]

1 hour ago, Calm said:

Bishop’s own words convicted him, imo.  

Yes, that is your opinion/judgment (which you have a right to and I am defending here), but it lacks all the information, "full knowledge of the facts" and legal "due process".  According to what has been said here, he is presumed innocent until "proven guilty" in a court of law.  That didn't happen, therefore you have no right to judge him -  according to the arguments I am hearing (which I disagree with).   The only difference between that case and this case is that you personally feel that the evidence is stronger - but it still lacks all the facts and due process.  He has not been proven guilty, therefore we are supposedly supposed to presume he is innocent and withhold all judgment. 

1 hour ago, Calm said:

Here the Church has not shared enough to make a judgment solely on what they have said. Whether one views the SEC charges as reliable enough to judge depends on one’s view of it.  I just don’t trust anyone I don’t know well enough to believe they wouldn’t be tempted to present everything in their favor and leave out what I might view as mitigating details or possibly inflate or as the judge described it “finesse” their claims.  And given the judge’s judgment, it appears the SEC has a history with doing this at times.  

I understand your reasons for being skeptical of the SECs findings, but you are still judging who you can trust based on limited facts and without due process. 

1 hour ago, Calm said:

I know some feel that the Church’s agreement to the settlement means it didn’t happen this time, but some defendants agree to pleas of no contest because they don’t want to take the risk of something worse happening.  I agree it is the Church’s responsibility we don’t know more, I don’t have a problem with anyone using that as part of their judgment…or the SEC charges for that matter.  I just think given the history of “finesse” we should be cautious accepting them without reserve.

I agree with using caution.  But we all come to our own judgments and personal opinions on this issue.  We all decide who and what to trust.  For example:

9 hours ago, Calm said:

Does my position get included in the above?  It being I believe the Church (as in senior leadership and its employees involved in this matter) had good intentions,  dry good intentions in fact, which I listed the four likely possibilities above, but in essence they were interested in protecting people rather than taking advantage or harming them as well as protecting the Church itself, which is protecting the faith community I am grateful to belong to; that they made some honest mistakes by following the legal team’s advice and unwisely ignoring other advice given about risks as well as ignoring signs it was a system destined to fail eventually; they (either leadership or the employees they delegated the responsibility to) also made in my view some dishonest mistakes (phone numbers and addresses not really belonging to the employees) and unethical ones (requiring employees to sign off on official legal documents  without allowing them to read them first).

Those are all personal judgments you have made from the same evidence I have access to with different conclusions from my own in some regards.  I respect your right to judge what you believe to be true and decide who or what you can trust in this issue based on the evidence presented from both sides.  I am defending this right we all have to judge and decide who and what we will believe and trust.   

 

Edited February 24, 2023 by pogi

[Tacenda]

2 hours 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.

Church being the operative word. Was it the members or the church? Was it money that the stake had from fast offerings? Not downing it I really admire that type of donating! I haven't seen that kind of money being donated to schools before. 

[Calm]

1 minute ago, Tacenda said:

Church being the operative word. Was it the members or the church? Was it money that the stake had from fast offerings? Not downing it I really admire that type of donating! I haven't seen that kind of money being donated to schools before. 

One of the reasons why churches are not taxed is because they encourage their members to contribute more to the community, so whether it was from the Church’s coffers or the members’ pockets is irrelevant to the point of a church adding the value lost in taxes to the community in other ways.  

[Ryan Dahle]

2 hours 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.

But then Smac explained, repeatedly, that merely smacking the label of "facts" on certain portions of the SEC report doesn't make them objective facts that everyone here can agree on. And he further explained in detail why we can't yet be "pretty confident" that these so-called facts are really true. As far as I have been able to tell (and I have been following this conversation pretty closely), his objections and concerns about the so-called "facts" haven't been rebutted in detail by actual countervailing evidence. So it seems that my point still stands: In the context of this discussion and in this discussion space, many of the SEC's statements can't yet be considered as "facts," even though some on this board are clearly inclined to view them as such (in the sense that it is their personal opinions that the SEC is likely correct on certain matters). 

2 hours ago, Analytics said:

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.

I'm not going to speak for Smac. I think that there are a number of ethical matters swirling around this issue. Some of them have little to do with the details of the SEC report (such as whether it is ethical, broadly speaking, for the Church to not publicly disclose its financial holdings and investments). Other ethical matters have to do with the the specific assertions made in the SEC report, and the conclusions that might be drawn from them. Furthermore, these two separate ethical realms obviously intersect at certain points for many observers.

As for those ethical conclusions that depend on the validity of statements made in the SEC filing, the various possible interpretations of those statements, and the assumptions that attend those interpretations, it would seem that we should be careful about throwing around the words "facts" (in reference to the SEC's assertions) for all of the reasons Smac has articulated. 

Edited February 24, 2023 by Ryan Dahle

[CA Steve]

47 minutes ago, jkwilliams said:

That's another thing I don't understand. When people do things that are wrong--legally or ethically--there's nothing wrong with saying so. 

We all know that leadership is fallible, but no one is allowed to ask why the emperor has no clothes.

[CV75]

2 hours ago, theplains said:

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.

This has nothing material to do with anything; it is just a cheap, guilt-by-association fallacy.

[california boy]

15 hours ago, smac97 said:

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

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

I have not claimed any expertise in securities laws.

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

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

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

'Cuz I did.

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

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

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

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

Thanks,

-Smac

Yet you didn't know the basic difference between a civil case and a criminal case. You have been going on for literally pages about the Church being innocent until proven guilty.  I think you even stated that it was a Constitutional right. In a civil case, that is not true.  Something even I knew without being a lawyer

Quote

 

What Is The Burden Of Proof In A Civil Case?

In a civil case, a plaintiff files a complaint and states both facts and legal grounds for the civil litigation.  The plaintiff has the burden of proof, which means the plaintiff must convince the jury that the facts are as presented and that there is grounds for the case.  Plaintiffs don’t have to make the jury 100 percent confident that everything the plaintiff says is true. Instead, as California Civil Jury Instruction 200 explains: “A party must persuade you [the jury], by the evidence presented in court, that what he or she is required to prove is more likely to be true than not true. This is referred to as “the burden of proof.”

If the plaintiff succeeds in persuading the jury, based on the evidence, that the allegations against the defendant are more likely to be true than not true, the plaintiff should prevail. If the plaintiff does not succeed in convincing a jury the allegations are more likely to be true than false, the defendant should prevail.

The burden of proof in civil litigation is lower for plaintiffs than the burden of proof is for prosecutors in a criminal case. A prosecutor has to prove a case against a defendant beyond a reasonable doubt. In a civil case, the standard is much lower. This explains why sometimes a person escapes criminal liability for something (like O.J. Simpson who avoided being convicted of killing his wife) but still loses a civil case arising from the same set of facts (O.J. lost his civil suit and was ordered to pay damages to family members of the victims).

 

Quote

 

In a civil case, civil cases are about money, suing for money, so we have a lower burden of proof. It's called a preponderance of the evidence. And what it really means is more likely true than not true, more likely true than not true, say 51% that might meet the civil burden of proof.

 

Being a lawyer does not make you an expert on all legal matters any more than being an artist does not mean I am qualified to do restoration work on the Sistine Chapel.  You might want to try and understand what Tribe is trying to tell you just a little more and stop having such a knee-jerk reaction to defend the Church at all costs making legal claims that are just not true.  Do you know more about the law than I do?  Yes of course you do.  Do you know a lot about all the laws governing SEC issues?  Probably not so much, yet you seem to be constantly speaking from a position of authority. 

 

ETA

Looks like you have already admitted that you didn't know what you were talking about when ranting about the whole innocent until proven guilty thing.  It is all I wanted to point out.  

13 hours ago, smac97 said:

I have not made such a proposal.  But the bar journal article is actually pretty good.

I have conceded the point.  The "presumption of innocence" typically/mostly applies in a criminal context.  There is a comparable, but not identical, concept in civil law.  Both concepts are rooted in "presumptions" and burdens of proof.

Okay.

Thanks,

-Smac

 

 

Edited February 24, 2023 by california boy

[smac97]

3 hours ago, Analytics said:

This is the real world, not a court of law.

Courts of law operate in "the real world."  

3 hours ago, Analytics said:

In the real world, we are allowed to gather and use the evidence before us to reach our own personal opinions about how likely various assertions are true.

I agree.  You are entitled to your own opinion, but not to your own facts.

You are also not entitled to say that the SEC's untested, unproven, unsubstantiated allegations are "facts" in any legal sense.  

3 hours ago, Analytics said:

Our opinions are not binding on the courts. The legal system has its own process for what the court will and will not consider to be "facts." But just because the court system has not reached its own opinion about whether or not something is a fact doesn't mean that we are refrained from sincerely endeavoring to evaluate the truthfulness of things and reaching our own conclusions about what are facts in the real world. Our own conclusions are not in any way binding on the court system. But they can still be fair, accurate evaluations of the actual evidence. 

I agree with all of this.

3 hours ago, Analytics said:

The SEC has asserted that certain things in their Order are "facts."

In a legal context, yes.

And if you want to take these allegations as true, feel free.  But what you cannot do is say that the SEC's findings are "facts" in a legal sense or context.

3 hours ago, Analytics said:

After carefully considering those allegations and everything else we know about these events,

"Everything else we know?"

3 hours ago, Analytics said:

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.

And you are entitled to it.

But you are not entitled to say that the SEC's untested, unproven, unsubstantiated allegations are "facts" in any legal sense.

3 hours ago, Analytics said:

"Due process" is a concept for the court system.

And an important one.

And one that may even has some application outside the court system.  

3 hours ago, Analytics said:

Before the court system will use the authority of the state to administer justice, there must be due process.

And perhaps there is some similar principle in what has been called the "court of public opinion."

3 hours ago, Analytics said:

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.

I agree.  I think "forming correct opinions" would or should involve some effort to clinically assess evidence, to vary its probative weight based on its credibility and provenance and so on.

"Benefit of the doubt," perhaps.

3 hours ago, Analytics said:

We should gather as much evidence as we can. We should endeavor to correctly use the normative tools of rationality when forming our opinions.

Boy, that sounds quite a bit like . . . Due Process, just less formal.

3 hours ago, Analytics said:

But "due process" is a principle of the court system, not a principle of forming personal opinions about things.

I think it is an applicable principle.  An important one.  It functions, or ought to, as a bulwark against prejudices and ignorance.

I think the starting point needs to be something akin to "innocent until proven guilty."  In an informal "real world" context, I think that normally takes the form of "benefit of the doubt," that is, to "to believe something good about someone, rather than something bad, when you have the possibility of doing either."  I think this is, or ought to be, the starting point, the default presumption.  I think that is difficult for people who are prejudiced, or who have a pre-existing and ongoing low opinion of another person or group.

You and I have respective biases in place relative to the Church of Jesus Christ of Latter-day Saints  The difference, though, is that mine is more "benefit of the doubt"-ish, whereas I think yours is very much the other way.  The Church is presumptively bad / dishonest / corrupt.  I think that is your presumption.  Your starting point.  And I think that starting point impairs your ability to give the Church anything like a fair hearing.

I acknowledge my bias likewise impairs my attempts at objectivity.  But I think the "facts" relative to the Church are, in the main, far more corroborative of my starting point than of yours.  I think the Church of Jesus Christ is well-intentioned and good.  Even benevolent.  Even wonderfully so.  It is not perfect by any means, but it is essentially and predominantly good.  So my starting point the "benefit of the doubt" is generally - though not always - borne out in both general and particular ways.

In contrast, I think your starting point is to very adverse and deprecatory.  I have spent many years reading your posts, and they are overwhelmingly negative and hostile.  No "benefit of the doubt."  Quite the contrary.  I think you see the Church (and its leaders) as presumptively dishonest, corrupt.  As substantively and predominantly bad.  I think that's your starting point.  That is the lens through which you view "evidence" about the Church.  I think you largely dismiss or ignore or mischaracterize evidence which can be viewed as probative of the Church's generalized decency and honesty, and give undue presumptive credence to evidence which can be viewed as probative of the Church being bad.

So I don't see a symmetry in our biases.  My presumption, my starting point, is benevolent toward the Church.  I give the benefit of the doubt to the Church, to its leaders, to its members, to its defenders.  You don't.  You go very much the other way.  You are, of course, at liberty to do that.  But it's an ugly thing to see.

3 hours ago, Analytics said:

So yes, I've determined for myself that the things the SEC asserts are facts really are facts.

"For myself" is fine.

But the SEC is not an adjudicative body.  The SEC Order is explicitly not binding on anyone.  It's unsubstantiated allegations are not law.

I think you have been gearing up to, in the future, declare as "fact" (your word, used many, many times) that the Church violated securities laws, and you will be pointing to the SEC Order when you do that.  

That is not "fact."  That is an opinion.  Your opinion.

3 hours ago, Analytics said:

Quote

Again, "sole investment discretion" is not in the statutory text.  It just ain't there.  And what is there ("investment discretion") seems to expressly allow for "some other person" to have "responsibility for {} investment decisions."  It may seem counterintuitive, but welcome to the world of federal legislation!

Meanwhile, here we are, many pages and many hundreds of posts later, and neither Analytics nor any other commenter bent on disparaging the Church because of the SEC's say-so has commented on this item.  

Let me get this straight. After lecturing me about how ignorant I am about the law, you suddenly want my legal opinion about the subtle, technical details of the code? Is that what you are asking of me? Why?

I want your opinion, yes.  Why?  For a few reasons.

First, you have felt at liberty to weigh in on various other legal aspects of this story, so I would like to see you weigh in on this one.

Second, I think this issue just might have "legs."  It might contravene the narrative you are trying to create about the Church.  I think you sometimes gloss over or ignore evidence which does not support your hostile assumptions and preferred conclusions about the Church.  Inasmuch as you declare aspirations towards "rationality," towards "gather{ing} and us{ing} the evidence before us to reach our own personal opinions," I think such aspirations pretty much require you to address the issue I have raised.  It may be "subtle," but it's potentially pretty important.  It may be "technical," but I think it still might be in or near your intellectual wheelhouse to at least warrant some examination.

Third, though I find your relentless hostility to my faith to be an ugly and repellant thing, I nevertheless admire and respect your native intellect and intelligence.  You are a formidable opponent.  If anyone can be relied upon to test my argument / reasoning / evidence, it's you.  If my analysis and reasoning are in error, I want to know that.  If your analysis and reasoning are in error, I want to know that, too.

Fourth, one of the reasons I come to this board is because it is not an echo chamber.  Critics of my faith, such as yourself, are plentiful.  I have found much value in listening to what you folks have to say.  Your endless antagonism toward my faith is somewhat bewildering to me, but I elect to use it to my advantage.  Interacting with people like you, though often less than pleasant, requires me to regularly re-examine both what I believe and why I believe it.  So I have.  And as a result, such interactions have had a substantial refining - and strengthening - effect on my faith in the Restored Gospel, on my assessment of the substantive goodness and verity of the doctrines, on my respect and honor for the Lord's anointed (whom I now view with clearer eyes than I did in my "put them on a pedestal" days), on my affection and regard for the Church as a whole, and ultimately, on my faith in Jesus Christ.

Joseph Smith was spot-on when he said that "{b}y proving contraries, truth is made manifest."  Your assessment of the Church, etc. is pretty "contrary" to mine.  I want to get to the truth, and you and your perspective help in that endeavor.

3 hours ago, Analytics said:

In any case, I'll give my opinion, FWIW. I believe the intent of the statutory text in question is to have managers with actual investment discretion sign the reports.

Huh.  Okay.  A few questions then:

• 1. How are you discerning "intent?"  Have you researched the legislative history behind the text?  Or is this just sheer guesswork on your part?
• 2. I assume by "the intent of the statutory text" you mean legislative intent, right?  The intent of the authors of the text?  
• 3. Are you familiar with how and why lawyers examine legislative intent?  Here is a good synopsis (from my friend, Chat GPT) :

Quote

A lawyer may research the legislative history of a statute for several reasons in a legal setting. Here are some of the most common ones:

1. To interpret the statute: Sometimes, the language of a statute may be unclear or ambiguous. In such cases, a lawyer may turn to the legislative history to understand the intent of the lawmakers who passed the law. The legislative history may include committee reports, floor debates, and other documents that shed light on the meaning and purpose of the statute.

2. To identify the legislative intent: By examining the legislative history, a lawyer can understand the goals and objectives that the lawmakers sought to achieve by passing the statute. This information may be helpful in arguing a case or in drafting a brief.

3. To rebut legislative history arguments: If the opposing counsel or judge is relying on a particular interpretation of the statute based on legislative history, a lawyer may need to research the legislative history to find evidence that contradicts that interpretation.

4. To challenge the constitutionality of the statute: Sometimes, the legislative history of a statute may reveal that it was passed for discriminatory or unconstitutional reasons. In such cases, a lawyer may use the legislative history to challenge the constitutionality of the statute.

Overall, researching the legislative history of a statute can provide valuable insights into the intent and purpose of the law, and can help lawyers make more effective arguments in court.

• 5. Are you familiar with the limitations on "legislative intent"-style arguments (which is what you seem to be presenting)?  Again from Chat GPT:

Quote

While legislative intent can be an important factor in interpreting statutes, there are certain situations in which relying on legislative intent arguments can be inappropriate for a lawyer. Here are some of the most common scenarios:

1. When the text of the statute is clear: If the language of the statute is unambiguous and the plain meaning of the text is clear, then relying on legislative intent arguments may be inappropriate. Courts generally give priority to the plain meaning of the text over legislative history unless the language of the statute is ambiguous or leads to an absurd result.

2. When the legislative history is inconclusive: The legislative history may sometimes be ambiguous or conflicting, and in such cases, it may be inappropriate for a lawyer to rely on legislative intent arguments.

3. When the legislative history is not relevant: The legislative history may be irrelevant if the issue in question was not discussed or debated during the legislative process. In such cases, relying on legislative intent arguments may be inappropriate.

4. When relying on legislative intent would violate separation of powers: In some cases, relying on legislative intent arguments may impinge on the separation of powers by giving too much deference to the legislature. For example, a court may be hesitant to rely on legislative intent arguments if doing so would involve the court in the legislative process.

5. When relying on legislative intent would be unfair: Sometimes, relying on legislative intent arguments may be unfair to one of the parties involved in the case. For example, if the legislative history is unclear or contradicts the plain meaning of the text, relying on legislative intent arguments may be unfair to the other party who relied on the plain meaning of the text.

Overall, while legislative intent can be an important factor in interpreting statutes, it is important for lawyers to consider whether relying on legislative intent arguments is appropriate in the particular case at hand.

Of the above-numbered items, I think the first one is most pertinent here: "If the language of the statute is unambiguous and the plain meaning of the text is clear, then relying on legislative intent arguments may be inappropriate. Courts generally give priority to the plain meaning of the text over legislative history unless the language of the statute is ambiguous or leads to an absurd result."

• 6. "Legislative intent" arguments pretty much always fail when they are used to attempt to vary from the "plain language" of the statute.  That is what you seem to be trying to do.  So how do you reconcile "actual investment discretion" with the statutory language (in bold) :

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A person exercises “investment discretion” with respect to an account if, directly or indirectly, such person (A) is authorized to determine what securities or other property shall be purchased or sold by or for the account, (B) makes decisions as to what securities or other property shall be purchased or sold by or for the account even though some other person may have responsibility for such investment decisions, or (C) otherwise exercises such influence with respect to the purchase and sale of securities or other property by or for the account as the Commission, by rule, determines, in the public interest or for the protection of investors, should be subject to the operation of the provisions of this chapter and the rules and regulations thereunder.

"Actual investment discretion" is a gloss.  Yours.  It's not in the text.  Moreover, your gloss about "intent" of the statutory text ("the intent of the statutory text in question is to have managers with actual investment discretion sign the reports") seems incompatible with the actual statutory text, which speaks of a person "exercis{ing} 'investment discretion'" by, inter alia, making "decisions as to what securities or other property shall be purchased or sold by or for the account even though some other person may have responsibility for such investment decisions."

• 7. Do you see any conflict between your surmise about "actual investment discretion" and the statutory text above ("even though some other person may have responsibility for such investment decisions")? 

I see a possible/apparent conflict.  The statute says nothing about "actual investment discretion."  To the contrary, the statute seems to allow "some other person {that the person with vested 'investment discretion'}" to "have responsibility for such investment decisions."  

• 8. Do you see any material difference between the phrases "investment discretion" and "sole investment discretion"?  If so, what is/are the difference(s)? 

I do see a material difference.  The statute says nothing about "sole investment discretion."  In fact, that phrase seems to contradict the actual statutory text, which allows "some other person {that the person with vested 'investment discretion'}" to "have responsibility for such investment decisions."  

• 9. Do you see any contradiction between "sole investment discretion" as referenced in the SEC Order and "investment discretion" as defined in the actual statutory text (particularly the provision allowing "some other person {that the person with vested 'investment discretion'}" to "have responsibility for such investment decisions")?

I think there may be a contradiction.  See above.  And the contradiction may be rather important when examining what the Church did, whether the legal advice it received was warranted, etc.

3 hours ago, Analytics said:

If person A has management discretion, creates an LLC "managed" by person "B", and then orders person "B" to delegate "management discretion" back to person A, and the only reason why all of this was done was to get the report filed by person "B" rather than person "A", I would consider this to be a tricky scheme engineered to get around the clear intent and meaning of the law. Maybe that complies with the letter of the law, but I wouldn't expect the SEC to look kindly on this kind of trickery.

When analyzing a statute in a legal setting, you do better by taking a more clinical, rather than emotional/invective approach, as you do here.  I would recommend that you avoid larding up your analysis with risible or conclusory terminology ("the only reason...," "tricky scheme," ... "get around the clear intent and meaning...").

Set aside, for the moment, what you think (based on the SEC Order) actually happened, and let's instead focus on what the statute states.  In the end it is the statutory text that is determinative.  Statutory language is usually applied by an impartial factfinder, which you obviously are not, but at least give it a college try.

Take a look at paragraph 11(b)(vi) of the "General Instructions" for 13F forms.  Please note how it differentiates "sole investment discretion" (subpart (b)(vi)(A)) from "shared-defined" discretion (subpart (b)(vi)(B)) and from "shared-other" discretion (subpart (b)(vi)(B)).  This comes into play in the 13F Form, which includes a spreadsheet (an "Information Table"), and which spreadsheet includes a "Column 8," and which column is supposed to show the type of "Voting Author{ity}," which the SEC splits into three categories: "sole" or "shared-defined" or "shared-other."

I think this is probably what gave the SEC heartburn over the LLCs' 13F forms.  From paragraph 27 of the SEC Order:

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

From this I surmise that the "Information Table" in the submitted 13F Forms showed the "Voting Authority" as being "sole" rather than "shared-defined" or "shared-other."

I further surmise that the SEC deemed these disclosures about "Voting Authority" to be incorrect because  - per paragraph 27, "Ensign Peak continued to manage the entire portfolio and at all times maintained investment and voting discretion over all the securities listed in the Forms 13F."  I can see that.  But I also see a few potential problems with it.  The statutory text does not reference or require "sole investment discretion."  The statutory text, instead, seems to allow for one party to be designated as having "investment discretion" even when "even though some other person may have responsibility for such investment decisions."  (Yes, that seems counterintuitive, but welcome to the world of federal legislation!)

The current guidance from the SEC does a pretty good job of explaining how to fill out Column 8 in the 13F Form's Information Table:

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Question 45 (Updated: January 3, 2023)

Q: What is sole investment discretion?

A: If you are the only entity managing the Section 13(f) securities reported on your Form 13F and you do not control (or are not controlled by) another reporting person, you have sole investment discretion. See Securities Exchange Act Section 3(a)(35), and Rule 13f-1(b). Enter the word SOLE in Column 6. See Special Instruction 11.b.vi to Form 13F [Adobe Acrobat^® (PDF) file].

For example, if you are an investment advisory firm reporting your aggregate holdings for all accounts under your management, you have sole investment discretion (even though the accounts may be handled by different individuals within your firm).

Question 46 (Updated: January 3, 2023)

Q: What is shared-defined investment discretion?

A: If you control another entity (or are controlled by another entity), you should report shared-defined investment discretion. This category includes parent corporations and their subsidiaries (e.g., a bank holding company and its subsidiaries), investment advisers and mutual funds that they advise, and insurance companies and their separate accounts. See Rule 13f-1(b) under the Securities Exchange Act. Enter the word DEFINED in Column 6. See Special Instruction 11.b.vi to Form 13F [Adobe Acrobat^® (PDF) file].

For example, if you are a bank holding company, you are required to file Form 13F even though you may not be directly involved in the management of Section 13(f) securities. Although your trust department or other subsidiary may handle that responsibility, you are deemed to have shared-defined investment discretion based on your corporate structure.

The above guidance (Question 46) is shown as being "updated" as of January 3, 2023.  I also see it in this book published in 2019, and in this article published in 2012 (referencing it being on the SEC website).

The reporting strategy in question here, though, was formulated in the late 90s and implemented in 2003. So that yields some questions for me:

• Was the foregoing guidance in effect back then?  I don't know.  We do not have enough information at present.
• Was the foregoing guidance even in existence back then?  I don't know.  We do not have enough information at present.
• Was the SEC's differentiation between "sole" and "shared-defined" or "shared-other" in existence back then?  I don't know.  We do not have enough information at present.
• Were attorneys maintaining oversight and monitoring of how the LLCs were filling out Column 8 of the Information Table portion of the 13F Form?  I don't know.  We do not have enough information at present.
• Should attorneys and EPA been paying more attention to this issue?  Yes.  

3 hours ago, Analytics said:

To put my opinion in perspective, once I was consulting for a large insurance company that was creating an innovative insurance product. The product wasn't exactly like anything that was in the market, and the question of whether it was "tax qualified" came up. I thought it pretty clearly was, and according to the clear intent of the law and of the product, it should have been tax qualified. Nevertheless, the company insisted on halting the product development process and getting an "opinion letter" from the IRS on the issue so that there wouldn't be any surprises down the road. Getting the opinion letter was a long and costly process. My opinion was that they may have been overly cautious, but there were some people there who had had run-ins with the awesome power of the state, and they wanted to do everything possible to avoid getting anywhere near a questionable line that might put them in the IRS's crosshairs. I respect that company's integrity and dedication to upholding the law.

The Church's attitude towards the law in this case is the polar opposite of that.

Meh.  You don't know that.  

3 hours ago, Analytics said:

Even if it could be successfully construed that the Church's scheme complied with the letter of the law, I don't think it complied with the intent and spirit of the law, and the whole endeavor makes me think they believe they are above the law and hold it in contempt.

Quelle surprise.

3 hours ago, Analytics said:

Every organization that I've worked with professionally would have taken the Church Audit Department's warning seriously and jumped to rectify the issue, regardless of whether an argument could be construed that it really was technically legal.

Meh.

Hanlon's Razor states, "Never attribute to malice that which is adequately explained by stupidity."

I would modify that a bit for this context: "Never attribute to malice that which is adequately explained by bureaucratic inertia / byzantine regulatory requirements / passage of time / failure to maintain ongoing oversight of regulatory compliance efforts."

There is nothing surprising about observing you draw the worst possible conclusions, paint the Church in the worst possible light, impute the worst possible motives onto the Church ("they believe they are above the law and hold it in contempt" - what a load of codswallop that is), and so on.  This is a day ending in "y," after all.

Fairminded folks, however, might be able and willing to take a step back and consider the context of what seems to have happened here.  

Fairminded folks might have had some past experience at being "caught" in failing to comply with this or that persnickety code, regulation, guideline, or whatever from a city, county, state or federal entity.  

Fairminded folks might be able and willing to give the Church the benefit of the doubt.

Thanks,

-Smac

Edited February 24, 2023 by smac97

[smac97]

1 hour ago, teddyaware said:

Questions:

1) If the church’s pre-2019 manner of filing is now regarded by many as an egregious attempt at deception and obfuscation, why was the church able to file in said questionable manner from 1997 to 2019 without ever being called out on it by the SEC?

Because the SEC has limited resources.  Here, they began an investigation due to a whistleblower (who, by the way, may be in line for a very sweet payday, a substantial portion of the fine paid by the Church).

1 hour ago, teddyaware said:

2) While some will point to the whistle blower’s more recent disclosures as the reason why the supposed “ruse” wasn’t caught sooner, nevertheless, why on earth didn’t the SEC catch such a glaringly obvious improper manner of filing for over 22 years?

Again, the SEC has limited resources.  And as you can see from some of my more analytical posts, the point of "noncompliance" is pretty obscure.  

1 hour ago, teddyaware said:

3) Wouldn’t the fact that the church wasn’t called out on its putatively improper manner of filing for over 22  years likely cause the fund managers to think they were doing nothing wrong?

Perhaps so.  That and the notion that the strategy had been recommended in legal advice.

1 hour ago, teddyaware said:

4) With such vast money sums of money being invested on an ongoing basis, why didn’t the SEC act prudently and do an audit to early on make sure the church was in compliance?

Same as above.  Limited resources.

Also, the "noncompliance" does not involve anything criminal or nefarious.  If there was a failure to comply with the law (specifically, if Column 8 of the "Information Table" of the 13F form was, in the eyes of the SEC, improperly populated), then a fine should be paid and corrective measures taken.  That has happened or will happen.

But the vitriolic condemnations coming from the likes of Analytics are, I think, overwrought, unfair, and uncharitable.

1 hour ago, teddyaware said:

All this has got me wondering if some at the SEC  knew all along that the church wasn’t in technical compliance, but waited till now to spring it on the nation to embarrass the church.

I doubt it.

1 hour ago, teddyaware said:

I wouldn’t put such cynical Machiavellian machinations beyond the lying, scheming, “gotcha culture” crooks who dominate “Foggy Bottom.”

Well, there are broader problems with the SEC, sure.  But targeting the Church specifically?  Nah, no evidence of that.

Thanks,

-Smac

[Calm]

2 minutes ago, smac97 said:

Here, they began an investigation due to a whistleblower (who, by the way, may be in line for a very sweet payday, a substantial portion of the fine paid by the Church).

I thought starting the investigation was due to the Mormonleaks report.  I have assumed he did not submit it to anyone at the time besides the public, maybe some media?

[smac97]

2 hours ago, Teancum said:

Sigh... more deflection.  Nobody says this. 

And yet, in inference is there.  It's one borne of ignorance, but it's there.

2 hours ago, Teancum said:

But it is true that the organization called The Church of Jesus Christ of Latter-day Saint has accumulated significant wealth. 

Which amounts are held in trust and expended on religious, educational, and philanthropic endeavors.

Which amounts are, in the main, managed very well.

Which amounts could be used to allow the Brethren to live a profligate lifestyle (which is the inference I think is intended to be conveyed to people less familiar with the Church than you and I).

Which amounts are not used to enrich the Brethren, who instead live a pretty restrained lifestyle, and many of whom make a tremendous financial sacrifice by giving up their careers at their apex to serve as General Authorities.

Thanks,

-Smac

[smac97]

2 hours ago, SeekingUnderstanding said:

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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.

All other non-profits are required to operate transparently. 

Bupkis.  Non-profits are all held to the same standard.

Thanks,

-Smac

[jkwilliams]

3 minutes ago, Calm said:

I thought starting the investigation was due to the Mormonleaks report.  I have assumed he did not submit it to anyone at the time besides the public, maybe some media?

Yes, that was my understanding, as well. 

[smac97]

2 hours ago, SeekingUnderstanding said:

People here seem to say that we don’t have all the “facts”.

That's quite apt.  We don't.

2 hours ago, SeekingUnderstanding said:

That the SEC’s assertions of fact (like that multiple internal church audits pointed out the risk of their reporting scheme) are mere assertions.

That is also apt.  There is no reasonable dispute about it, actually.  In a legal context, allegations that have been neither admitted nor adjudicated are not "facts."  

2 hours ago, SeekingUnderstanding said:

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.

What is preventing you from telling us your IRL name?  Publishing your logins?  Your home address?  Your SSN?  

Oh yeah, it’s because SeekingUnderstanding wants to maintain as much opaqueness here as possible.  And shame on him for that.  

2 hours ago, SeekingUnderstanding said:

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. 

I think we should give each other the benefit of the doubt as a matter of course.

2 hours ago, SeekingUnderstanding said:

This episode demonstrates exactly how much of a benefit of the doubt the church’s silence should be given.

Right.  

2 hours ago, SeekingUnderstanding said:

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. 

SeekingUnderstanding is willing to go through great lengths to obscure and hide its operations and keep their knowledge away from members and the public.   And shame on him for that.  

2 hours ago, SeekingUnderstanding said:

@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. 

But "scorn," nonetheless.  

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1. open or unqualified contempt; disdain:His face and attitude showed the scorn he felt.
2. an object of derision or contempt.
3. a derisive or contemptuous action or speech.

Thanks,

-Smac

[smac97]

2 hours ago, jkwilliams said:

Quote

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.

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

The first rule of gaslighting: Deny that there's any such thing, while at the same time the very thing that is being noted is under way.

The second rule of gaslighting: See the rule #1.

Thanks,

-Smac

[jkwilliams]

1 minute ago, smac97 said:

The first rule of gaslighting: Deny that there's any such thing, while at the same time the very thing that is being noted is under way.

The second rule of gaslighting: See the rule #1.

Thanks,

-Smac

It gets a little old when you constantly carp on how religious organizations are unjustly targeted deliberately. Again, give it a rest. Accusing me of gaslighting means nothing. I'm not the one pretending to be under siege. 

[smac97]

3 hours ago, SeekingUnderstanding said:

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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.

No, the SEC alleged this.  The SEC is not an adjudicative body, and the Church didn't admit anything.

When the police conduct an investigation, nobody ever claims "The police found that Ron Jones committed kidnapping and extortion."  That is not the job of the police.

When the matter is turned over to the prosecutor, nobody ever claims "The prosecutor found that Ron Jones committed kidnapping and extortion."  That is not the job of the prosecutor.

The only way the State can "find" a violation of the law is via an impartial factfinder.  That did not happen here.  Instead, the SEC settled the matter with no admission by the Church.

3 hours ago, SeekingUnderstanding said:

The fact of whether the law was broken though is immaterial to this critic though. I couldn’t care less.

Right.  In a heads-the-church-loses-tails-the-church-loses environment, there is no need to examine such things.  Just condemn and excoriate the Church for . . . whatever, and then move on.

Convenient, that.

3 hours ago, SeekingUnderstanding said:

What this issue exposes is the lengths the church will go to be as opaque as possible. 

And this is a nefarious and terrible thing . . . why, Mr. Posts-Behind-a-Pseudonym?

"Opacity for thee and thine, but not for me and mine," I guess.

Thanks,

-Smac

Edited February 24, 2023 by smac97

[smac97]

19 minutes ago, Calm said:

I thought starting the investigation was due to the Mormonleaks report.  I have assumed he did not submit it to anyone at the time besides the public, maybe some media?

I read a news item the other day about how Whats-his-name Nielsen being in line for a payday.  That's what his lawyer was claiming, anyway.  

Thanks,

-Smac

[smac97]

7 minutes ago, jkwilliams said:

Quote

The first rule of gaslighting: Deny that there's any such thing, while at the same time the very thing that is being noted is under way.

The second rule of gaslighting: See the rule #1.

It gets a little old when you constantly carp on how religious organizations are unjustly targeted deliberately.

It gets a little old when the Church of Jesus Christ of Latter-day Saints is unjustly targeted deliberately.

7 minutes ago, jkwilliams said:

Again, give it a rest.

Feel free to disregard my posts.

7 minutes ago, jkwilliams said:

Accusing me of gaslighting means nothing.

Okay.

7 minutes ago, jkwilliams said:

I'm not the one pretending to be under siege. 

Right.  This thread has been a showcase for tolerance, clinical assessment, and objectivity.

Thanks,

-Smac