Church fined by SEC

[CA Steve]

25 minutes ago, why me said:

Well...I don't expect perfection from anyone or anyone representing an organization. Human beings are human beings. Stuff happens. However, what does this all have to do with the book of mormon? And that is what is important. It has nothing to do with it. Now if they would find a letter by Joseph Smith stating that he wrote the book, well, the church is history. But....

Whelp, might as well shut down the forum with arguments like this.

[jkwilliams]

1 minute ago, CA Steve said:

Whelp, might as well shut down the forum with arguments like this.

Yep, it’s check and mate. 

[mfbukowski]

Dang it.

Now I have to read this whole thread to figure out what happened?

Blaaahhch.

[mfbukowski]

On 2/21/2023 at 9:28 AM, bsjkki said:

Church Q and A

Q: Who is Ensign Peak Advisors?

A: It is the affiliated investment manager for the church.

Q: Who is the SEC?

A: The Securities and Exchange Commission regulates the United States securities markets. It has broad jurisdiction.

Q: What are Forms 13F?

A: Investment managers who oversee a portfolio of public equities above a certain threshold are required to file Forms 13F with the SEC quarterly, which publicly disclose the names of the securities and their values.

Q: Did the church know about the practices at Ensign Peak described in the order?

A: The church’s senior leadership received and relied upon legal counsel when it approved of the use of the external companies to make the filings. Ensign Peak handled the mechanics of the filing process. The church’s senior leadership never prepared or filed the specific reports at issue.

Q: Has the reporting practice that prompted the SEC cease-and-desist order now stopped?

A: Yes. In June 2019, the SEC first expressed concern about Ensign Peak’s reporting approach. Ensign Peak adjusted its approach and began filing a single aggregated report. Since that time, 13 quarterly reports have been filed in full accordance with SEC requirements.

Q: Did Ensign Peak fail to comply with SEC regulations?

A: We reached resolution with the SEC. We affirm our commitment to comply with the law, regret mistakes made and now consider this matter closed.

Q: When will the penalties be paid?

A: The penalties will be paid shortly to the U.S. Treasury.

Q: Where does the $5 million come from to satisfy the settlement?

A: The investment returns of the church will be used to pay the settlement.

Q: How are the church’s reserves invested?

A: Following the principle of preparing for the future, both near- and long-term, the church maintains diversified reserves, including stocks, bonds, commercial and residential real estate, and agricultural properties. All funds are invested solely to support the church’s mission.

Q: Why did this settlement take place now?

A: We have worked with the SEC for years to come to this settlement. We reached resolution and chose not to prolong the matter.

Q: Will this settlement impact Ensign Peak’s ability to continue to make investments?

A: No. With the announcement of the order, the matter is closed.

Who wrote this?

[jkwilliams]

6 minutes ago, mfbukowski said:

Who wrote this?

I’m pretty sure that’s from the church’s newsroom. 

[SeekingUnderstanding]

6 minutes ago, mfbukowski said:

Who wrote this?

Presumably church public affairs with input from people at ensign peak under the direction of the brethren. 

[bsjkki]

13 minutes ago, mfbukowski said:

Who wrote this?

It was quoted in the Deseret News article. 

[pogi]

2 hours ago, why me said:

Well...I don't expect perfection from anyone or anyone representing an organization. Human beings are human beings. Stuff happens. However, what does this all have to do with the book of mormon?

And that is what is important. It has nothing to do with it. Now if they would find a letter by Joseph Smith stating that he wrote the book, well, the church is history. But....

Once again, people are missing the point and mischaracterizing the concern many are having.

I don't think anyone is expecting perfection, but I do expect measures of restitution.  Not just legal restitution which has been payed, but work towards restoration of trust by actually addressing the concerns of members.  It wouldn't even take much for me.  A simple acknowledgement would go a long way.   I would love to hear the church say something like this -

"we are aware that there are members who feel like a sacred trust has been violated.  We understand that there are concerns about dishonest behavior.  We understand that members want to see their leaders living the same standards of temple worthiness that each member is expected to live. We understand that members have concerns about information being hidden from them, and that some may even feel manipulated by such behavior.  The church has gone a long way to become more transparent in our history and to paint a more accurate and honest narrative.  Many things were left unsaid in the past in good-intentioned efforts to protect members from information that leaders believed might have had negative consequences on the faith of some members.  We understand now that that was the wrong approach, and that many members may have felt manipulated and even infantilized by this approach and effort to protect them and keep them safe from history that some find troubling and concerning.  Instead of addressing those issues head on in a transparent way (trusting that the Saints who are expected to be willing to sacrifice all that they have for the kingdom can endure the truth as well) it was hidden.  We regret that mistake. "  

"Some may feel those old wounds re-opened with this revelation about church finances which were hidden, again in a good-willed attempt to protect members from negative consequences.   We sincerely regret the violation of trust that this has caused and want you to know that this sacred trust is important to us and will be taking every effort to rebuild this trust.  We want you to feel like you can be trusted with these things too.  Those who have violated principles of honesty and ethical practices have been disciplined and corrected and we are taking measures to review practices throughout the church to see how instances like this can be avoided in the future.  You place a sacred trust in us, and we intend to do all we can to restore and protect that trust in all that we do."  

I don't see or hear anything even remotely close to that happening.  It would be so healing. 

Forgiveness is good.  Apathy and indifference is not.  "Stuff happens" and "we consider this matter closed" is not helpful.  How this is not obvious is beyond me.  The ironic thing is that the fall-out from getting caught for trying to obfuscate this in order to protect members is going to cause more damage than not trying to protect members from the truth in the first place.   It back-fires every single time.  And I have no assurance that they even care or want to change that core motivational factor in other areas. 

But yes, the Book of Mormon is true and Joseph Smith was a prophet of God.  Now can we talk about institutional trust, more healthy non-parent-child relationships and dynamics with its members, and honesty? 

Edited February 26 by pogi

[Kenngo1969]

Dan Peterson weighs in.

[california boy]

34 minutes ago, Nofear said:

Indeed, one of the most important elements of this brouhaha is what the SEC did not do.  Because there were no allegations that the intent was to cheat, steal, or defraud. And it should be pointed out that the LLCs themselves did file the forms13f but that instead of the individual forms, Ensign Peak Associates should have filed an aggregate form as it now currently does.

"There can be a fine line between designing a regime in an effort to comply with the law and engaging in a deliberate effort to evade the law, and the SEC clearly believes that Ensign Peak crossed that line." Followed by "Several elements of the settled administrative proceeding support the conclusion that the alleged violation was largely technical."  James Anderson then gives specifics.

• "First, the settlement alleges only violations of section 13(f) of the Exchange Act and rule 13f-1 thereunder, and not any of the broad anti-fraud provisions under the federal securities laws often cited by the SEC in settled administrative proceedings.
• Second, the settlement does not impose a requirement to disgorge any improper financial benefits from the failure to file Forms 13F. The absence of a disgorgement requirement supports the conclusion that the SEC did not identify any financial impropriety or improper conduct that resulted in a financial benefit to Ensign Peak. Otherwise, one can assume that the SEC would have imposed a disgorgement requirement in addition to the penalty.
• Finally, apart from the requirement to cease and desist and pay an administrative penalty, the settlement does not impose any additional undertakings or remedial steps common in settled SEC administrative proceedings, likely because Ensign Peak corrected its Forms 13F."

That the LLCs were designed to obscure that holdings of Ensign Peak Associates from public scrutiny isn't really disputed. Obscure = lie? I suppose one can use that language if one wants. Yet, even in that obfuscation, the SEC did not accuse Ensign Peak Associates of using that veil of obscurity to dishonestly use its fiscal leverage to abuse the market to its advantage to get rich(er).

I agree with what you wrote. It is not the role of the SEC to deal with the way members and others may feel about the reasons for the deceitful way the Church hid it's assets.  The SEC's only interest is to get the Church into compliance.  

It is up to the Church to deal with the loss of trust that others have because of this incident.  How the Church handles that loss of trust some feel is totally up to the Church.  They may very well sweep it under the rug and never address it again.  But make not mistake, how the Church handles itself will have a profound affect on some people who are no longer willing to give the Church blind loyalty it sometimes seems to demand when it makes these breaches of trust.  Some people need at least an apology from the Church for their actions.  Others will probably never accept any apology.  They feel like they have forgiven the Church way too many times already for past bad behavior.

I can tell you this.  Those apologists who have defended the Church's actions to the extreme degree, not willing to even suggest that any wrong doing has occurred have not helped one iota those that feel a betrayal of trust.  If anything, it has pushed them further down a rabbit hole.

[JAHS]

16 minutes ago, california boy said:

I agree with what you wrote. It is not the role of the SEC to deal with the way members and others may feel about the reasons for the deceitful way the Church hid it's assets.  The SEC's only interest is to get the Church into compliance.  

It is up to the Church to deal with the loss of trust that others have because of this incident.  How the Church handles that loss of trust some feel is totally up to the Church.  They may very well sweep it under the rug and never address it again.  But make not mistake, how the Church handles itself will have a profound affect on some people who are no longer willing to give the Church blind loyalty it sometimes seems to demand when it makes these breaches of trust.  Some people need at least an apology from the Church for their actions.  Others will probably never accept any apology.  They feel like they have forgiven the Church way too many times already for past bad behavior.

I can tell you this.  Those apologists who have defended the Church's actions to the extreme degree, not willing to even suggest that any wrong doing has occurred have not helped one iota those that feel a betrayal of trust.  If anything, it has pushed them further down a rabbit hole.

Anyone who practices blind loyalty as a member should not be a member. Also anyone who can not forgive mistakes that are made should also not be a member. A person's testimony should not be based on what men do as leaders of the Church with money, rather it should  be based on the truthfulness of the doctrines and principles of God as confirmed by the Holy Ghost. That kind of testimony can be stronger, longer lasting and more forgiving when mistakes are made. 

[MiserereNobis]

Delete, sorry. 

Edited February 26 by MiserereNobis

[pogi]

2 hours ago, Kenngo1969 said:

Dan Peterson weighs in.

Basically he admits that he doesn’t know the first thing about this issue but somehow finds the capacity to judge the concern that many members have with it as “unfortunate”.  Dear Mr. Peterson, if you admit that don’t know what you are talking about, then please restrain yourself.  Thank you!

He then seems to agree with one young Latter Day Saint business man’s reaction at those who take issue with this by “despairing at human stupidity”, suggesting that “maybe that’s the right reaction.”😪

“Those poor unfortunate souls!”... and “stupid”

Why is it that apologetics these days seems to attempt to push so many members away instead of trying to comfort and corral them by addressing their concerns.  There seems to be no desire for association and comradery in the faith that we all love.   Instead we are dismissed and rejected as “stupid humans”. 

In one breath we are so casually and disgracefully dismissed while in another breath admitting that he doesn’t even understand the issue.   That is apologetics? Such a helpful approach in finding answers and comfort for those with questions and concerns.  I thought that’s what apologetics was supposed to be about, but it seems to be more and more aimed at actively splintering the faithful ranks in some kind of tribalistic loyalty and hierarchy.  That’s what I find “unfortunate”.

 

Edited February 26 by pogi

[Kenngo1969]

4 minutes ago, pogi said:

... if you don’t know what you are talking about, then please withhold the judgment.  Thank you! ...

Arguably, that same standard could apply, I think, to various commenters on this thread, yet they don't seem to have any qualms about weighing in.  Perhaps you are unwilling to apply the same standard to them because they happen to agree with you.

 

[pogi]

38 minutes ago, Kenngo1969 said:

Arguably, that same standard could apply, I think, to various commenters on this thread, yet they don't seem to have any qualms about weighing in.  Perhaps you are unwilling to apply the same standard to them because they happen to agree with you.

 

You see, that is the problem.  The issue that many are having is not a legal issue entrenched in complicated technicalities.  But that is how we are being dismissed.  You’re just not smart enough to understand the technicalities therefore your judgment is unjust, I hear it said.  Well, it seems to me that there is simply too few ears who care to actually hear what we are saying.  It’s not about the law.  

I would hold anyone and everyone who claims and admits that they don’t know what they are talking about to the same standard, but I am not just going to presume to know what people understand.  It seems that many are relatively expert on such matters, including ttribe - but again, that is all besides the point for me.

Edited February 26 by pogi

[why me]

4 hours ago, pogi said:

But yes, the Book of Mormon is true and Joseph Smith was a prophet of God.  Now can we talk about institutional trust, more healthy non-parent-child relationships and dynamics with its members, and honesty? 

I think that what I am speaking about is the loss of testimony that many may have about the doctrines of the church because of the money issue.  And we are seeing this happen at the moment. We may see the same thing happen that happened at the time of Joseph Smith about the banking problem where people lost money.  The foundation of the church is simple: the book of mornon and not the perfection of human beings who may make mistakes.

[why me]

32 minutes ago, pogi said:

  I would hold anyone and everyone who claims and admits that they don’t know what they are talking about to the same standard, but I am not just going to presume to know what people understand.  It seems that many are relatively expert on such matters, including ttribe - but again, that is all besides the point for me.

I think that people need to relax for a moment and see what happens in the coming days or weeks. And if nothing happens, then it would be a good conversation to have. But now....it is great to discuss etc. But I assume that many members are already rushing to judgement and perhaps contemplating leaving the church.

I know of another church who had investment problems and with their own bank. But I don't see it as a reflection of the faith itself. Just people who listen to the wrong voice or spirit who are in position to handle money. What to do?

[california boy]

2 hours ago, JAHS said:

Anyone who practices blind loyalty as a member should not be a member. Also anyone who can not forgive mistakes that are made should also not be a member. A person's testimony should not be based on what men do as leaders of the Church with money, rather it should  be based on the truthfulness of the doctrines and principles of God as confirmed by the Holy Ghost. That kind of testimony can be stronger, longer lasting and more forgiving when mistakes are made. 

So you don't think that anything I wrote has any merit?  You don't think that people struggle when Church leaders do this kind of thing?  And if they do then they don't really have a testimony?

Trying to understand why you wrote what you wrote and why you so easily dismiss the concerns that some are having over this and other past issue as not being valid concerns.  

Edited February 26 by california boy

[mfbukowski]

6 hours ago, Kenngo1969 said:

Dan Peterson weighs in.

Good piece, thanks.

I do hang out with tax attorneys and financial guys and you have to understand the mentality.  They are wannabe artists.

Do you know that attorneys are often married to or hang out with artists?  I have seen it again and again.

Their jobs are to come up with the most innovative and artistic scheme they can create using entities to protect or save their clients. You take a nonprofit and have people contribute their estates to  it thru a special trust and then create a life insurance trust with coverage equal to the amount of taxes the kids would pay on the estate, plus the cost of the insurance, so that when the client dies, the kids get paid by the insurance tax free. That kind of stuff is not even creative, it's a standard tool.

So you give them an entity or 20 like the church, and there's no end to the stuff they can come up with!

Yes it got out of hand, yes they messed up, and yes they got burned a little, and hopefully will figure out better oversight in the future.

Meh.

Not much here imo. 

Part of life and big institutions, and lotsa attorneys.

[teddyaware]

1 hour ago, mfbukowski said:

Good piece, thanks.

I do hang out with tax attorneys and financial guys and you have to understand the mentality.  They are wannabe artists.

Do you know that attorneys are often married to or hang out with artists?  I have seen it again and again.

Their jobs are to come up with the most innovative and artistic scheme they can create using entities to protect or save their clients. You take a nonprofit and have people contribute their estates to  it thru a special trust and then create a life insurance trust with coverage equal to the amount of taxes the kids would pay on the estate, plus the cost of the insurance, so that when the client dies, the kids get paid by the insurance tax free. That kind of stuff is not even creative, it's a standard tool.

So you give them an entity or 20 like the church, and there's no end to the stuff they can come up with!

Yes it got out of hand, yes they messed up, and yes they got burned a little, and hopefully will figure out better oversight in the future.

Meh.

Not much here imo. 

Part of life and big institutions, and lotsa attorneys.

And doesn’t at least some measure of responsibility lie with the SEC itself, because they allowed the now disputed reporting method to go on for 22 years?! Has any member of the SEC said, “when one considers the massive size of the church’s investments, we should have caught this questionable method of reporting much earlier, long before allowing it to become a headline issue in the media.”

And I also think the church haters are making a mountain out of a molehill when you consider that the fine amounts to only $227,000 per year during the 22 years that the disputed reporting method was allowed to continue. That’s a very small fine to pay when the investment accounts total in the vicinity of $100 billion dollars. It amounts to a fine of only .000227% per year.

I believe most of the bitter critics on this board are blowing this story so far out of proportion because they’re desperately trying to justify their exit from the church. But no matter how much they caterwaul and bellyache the church is going to marvelously triumph in the end and they’re going to miserably fail, the Book of Mormon so declares it.

15 For behold, saith the prophet, the time cometh speedily that Satan shall have no more power over the hearts of the children of men; for the day soon cometh that all the proud and they who do wickedly shall be as stubble; and the day cometh that they must be burned.

16 For the time soon cometh that the fulness of the wrath of God shall be poured out upon all the children of men; for he will not suffer that the wicked shall destroy the righteous.

17 Wherefore, he will preserve the righteous by his power, even if it so be that the fulness of his wrath must come, and the righteous be preserved, even unto the destruction of their enemies by fire. Wherefore, the righteous need not fear; for thus saith the prophet, they shall be saved, even if it so be as by fire. (1 Nephi 22)

 

[teddyaware]

47 minutes ago, teddyaware said:

And doesn’t at least some measure of responsibility lie with the SEC itself, because they allowed the now disputed reporting method to go on for 22 years?! Has any member of the SEC said, “when one considers the massive size of the church’s investments, we should have caught this questionable method of reporting much earlier, long before allowing it to become a headline issue in the media.” And after 22 full years of not having your reporting methods being called into question, can anyone blame the church lawyers and accountants for thinking their creative reporting method was in compliance with the law? Or is the SEC so incompetent that it never dawned on any of them — for a total of 22 years no less — to audit the reporting of EPA due to the fact that it would seem a good idea to closely scrutinize massive investment accounts that totaled into the tens of billions?

And I also think the church haters are making a mountain out of a molehill when you consider that the fines amount to only $227,000 per year during the 22 years that the disputed reporting method was allowed to continue. That’s a very small fine to pay when the investment accounts totaled in the vicinity of $100 billion dollars. It amounts to a fine of only .000227% per year during the now claimed 22 year-long period of noncompliance.

I believe most of the bitter critics on this board are blowing this story so far out of proportion because they’re desperately trying to justify their exit from the church. But no matter how much they caterwaul and bellyache the church is going to marvelously triumph in the end and they’re going to miserably fail, the Book of Mormon so declares it.

15 For behold, saith the prophet, the time cometh speedily that Satan shall have no more power over the hearts of the children of men; for the day soon cometh that all the proud and they who do wickedly shall be as stubble; and the day cometh that they must be burned.

16 For the time soon cometh that the fulness of the wrath of God shall be poured out upon all the children of men; for he will not suffer that the wicked shall destroy the righteous.

17 Wherefore, he will preserve the righteous by his power, even if it so be that the fulness of his wrath must come, and the righteous be preserved, even unto the destruction of their enemies by fire. Wherefore, the righteous need not fear; for thus saith the prophet, they shall be saved, even if it so be as by fire. (1 Nephi 22)

 

 

Edited February 26 by teddyaware

[SeekingUnderstanding]

2 hours ago, teddyaware said:

And doesn’t at least some measure of responsibility lie with the SEC itself, because they allowed the now disputed reporting method to go on for 22 years?! Has any member of the SEC said, “when one considers the massive size of the church’s investments, we should have caught this questionable method of reporting much earlier, long before allowing it to become a headline issue in the media.”

How on earth would the SEC find out? The whole scheme was to keep them, church members and the public in the dark. They found out like the rest of us, when Mormon leaks pieced it together. 

Edited February 26 by SeekingUnderstanding

[Nofear]

1 hour ago, SeekingUnderstanding said:

How on earth would the SEC find out? The whole scheme was to keep them, church members and the public in the dark. They found out like the rest of us, when Mormon leaks pieced it together. 

Same way they found out in the end. The LLCs were filing the forms separately. At some point some bureaucrat in SEC asked, “hey, are you guys sufficiently independent to do so?” (perhaps because of external media attention). Why not ask before? Aside from the technical failing no other accusation of untoward fiscal activity was levied. No restitutions for ill gotten gains from market yahoorinees was asked for or suggested occurred (market yahooriness that the rule is designed for in the first place).

[pogi]

10 hours ago, why me said:

I think that what I am speaking about is the loss of testimony that many may have about the doctrines of the church because of the money issue.  And we are seeing this happen at the moment. We may see the same thing happen that happened at the time of Joseph Smith about the banking problem where people lost money.  The foundation of the church is simple: the book of mornon and not the perfection of human beings who may make mistakes.

10 hours ago, why me said:

I think that people need to relax for a moment and see what happens in the coming days or weeks. And if nothing happens, then it would be a good conversation to have. But now....it is great to discuss etc. But I assume that many members are already rushing to judgement and perhaps contemplating leaving the church.

I know of another church who had investment problems and with their own bank. But I don't see it as a reflection of the faith itself. Just people who listen to the wrong voice or spirit who are in position to handle money. What to do?

I don't know of anyone leaving the church over this.   But I wouldn't be surprised if this pushes some over the edge.  I highly doubt anyone would leave over this issue in isolation, but it might be the last straw for some. 

I expect very little to be said about this in the future.  The church's modus operandi has always been to keep tight lipped and redirect attention to the core truth claims as you have done.  They have made their statement and consider the issue closed.  Depending on how many members react to this, or stop paying tithing because of it, or decide to leave the church, it may force their hand to address it some more.  I highly doubt that they will acknowledge, validate, or directly address the feelings and concerns that so many are having, but suspect that it will sound a lot like your response - The Book of Mormon is true, that is all that matters, so chill out, oh ya pay your tithing, pay your tithing, pay your tithing.  I predict a strong emphasis on paying tithing in the near future.  I am guessing there will be a heavy emphasis on the reasons why we should pay our tithing out of faith, sacrifice, and dedication to the Lord, and not because the church needs the money.  I agree with that message.  Which is why I find it so unfortunate that they went to such lengths to pretend like they don't have a lot of money because they thought we couldn't handle the truth, or stand up to social pressures, and pay for the right reasons.  

Joseph Smith had a keen understanding of what kindles and keeps faith burning.  He said:

Quote

a religion that does not require the sacrifice of all things never has power sufficient to produce the faith necessary unto life and salvation” ( Lectures on Faith, 6:7).

What kind of soft handed faith is being engender today by shielding us from the truth because they think we are not strong enough to handle it?  If they would have come out strong and transparent from the beginning, acknowledging the great blessing and wealth of the church due in part to the faithfulness of its members in paying tithing - that the windows of heaven have been opened unto us, so don't close the windows now by thinking it is ok to stop paying tithing.  If they would have been forthright about the reasons they are stockpiling. If they would have been honest none of this would have happened, and I suspect very few would have stopped paying tithing because of it, but I fear there will be many who stop paying now, and some may even leave all because they feel infantilized and manipulated.  I sure as heck hope they address that relationship dynamic and how they intend to change it for the better. 

That is my suspicion based on what I know of the church.  I am not placing any final judgments here.  I would be pleasantly surprised if I am wrong.  

Edited February 26 by pogi

[jkwilliams]

1 hour ago, SeekingUnderstanding said:

How on earth would the SEC find out? The whole scheme was to keep them, church members and the public in the dark. They found out like the rest of us, when Mormon leaks pieced it together. 

You have to admit that’s a novel approach: blame the government for not catching lawbreakers in a timely manner.   😂😂😂