Church fined by SEC

[pogi]

52 minutes ago, T-Shirt said:

None of this is fact, sorry.

If the basic allegations are true...excuse me.  (not a very big if in the case of the CAD audit)

I have no reason to believe that the CAD did not highlight the risk.  That doesn't seem like something the SEC would make up.  

If the church tried to clarify with the SEC after the CAD audit, they would have stated in their response that they tried to reach out to the SEC to clarify and followed their recommendations. 

The last point about the legal obligations of the fiduciary is indeed true.  

 

Edited February 28, 2023 by pogi

[Snodgrassian]

37 minutes ago, bluebell said:

One possible explanation is that the church did not want to reveal their finances, and if this went to trial, that would likely be a part of it.

But isn't it too late for that at this point? I would think that the version of the SEC report that we have had to be agreed upon by the Church as part of the settlement. So the Church could not refute the claims, and/or they needed it to go away before more damage was done due to additional scrutiny. My guess is that the report is accurate enough, hence the Church agreed to it. Not a big deal, but not a good look. It just more "evidence" that some people like to point to as the Church is operating more like a business than a religious institution. 

[ttribe]

17 minutes ago, T-Shirt said:

Read the paragraph again. I think you may be assuming things beyond the actual words. Here it is:

The word "highlighted" does not refer their report, as you claim, it refers to their discussion with Ensign Peak's senior management. People are reading into this much more than is there.

Here's the whole paragraph:

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

Repeating myself, because you refuse to hear me, the IA department performed two audits of EPA; one in 2014 and 2017. If IA raised the issue with management in "discussions," the standard procedure would be to document this discussion in their workpapers and their report. The SEC pointed this out indicating they had access to the workpapers and reports of IA. IA in the Church reports to the First Presidency and the Presiding Bishopric. Based all my years of experience (25+) in accounting, auditing, and financial forensics, I would find the probability that these "discussions" were not documented in the audit files and not passed along to the First Presidency and Presiding Bishopric to be near zero.

 

 

Edited February 28, 2023 by ttribe

[bluebell]

39 minutes ago, rockpond said:

If that's true, is it okay for the prophet to accept and agree to false statements about the church and church leader's integrity in order to keep church finances private?

Per the signed agreement the church admits to no wrongdoing. Neither does it deny it.

So speaking for myself, yes, I think that’s fine.

[ttribe]

Just now, bluebell said:

Per the signed agreement the church admits to no wrongdoing. Neither does it deny it.

So speaking for myself, yes, I think that’s fine.

To be clear, you're okay with the Church agreeing to the publication of a document containing false allegations about the Church's conduct?

[bluebell]

5 minutes ago, Snodgrassian said:

But isn't it too late for that at this point? I would think that the version of the SEC report that we have had to be agreed upon by the Church as part of the settlement. So the Church could not refute the claims, and/or they needed it to go away before more damage was done due to additional scrutiny. My guess is that the report is accurate enough, hence the Church agreed to it. Not a big deal, but not a good look. It just more "evidence" that some people like to point to as the Church is operating more like a business than a religious institution. 

As others have said repeatedly on this thread, the church did not agree to any of the claims. Neither did they disagree.  The order that was signed neither agreed nor disagreed with the SEC findings. 

[rockpond]

3 minutes ago, bluebell said:

Per the signed agreement the church admits to no wrongdoing. Neither does it deny it.

So speaking for myself, yes, I think that’s fine.

Fair enough.

For me, I consider this to be the First Presidency admitting that they were trying to hid the value of the Church's investment portfolio (at least part of it).  I hope it will be followed up with comments from President Nelson to the members in General Conference and that more transparency will result.

[T-Shirt]

6 minutes ago, rockpond said:

I'm curious (because I haven't read all 45 pages of posts here) -- is your position that the First Presidency is 100% innocent of having tried to hide the size and details of the Church's investment portfolio from the general public (and members)?

No, I have not stated this. I don't know for sure. I suspect that the report of the SEC is largely correct. It appears that the First Presidency, at the time, consisting of President Hinckley, Elder Monson and Elder Faust, wanted to keep the full portfolio's value hidden from, according to the SEC report, the "Street" and the "media". I don't really have a problem with this. Many have speculated as to why and I could come up with several legitimate reasons, but ultimately, we don't know why. I don't necessarily agree with hiding it from the public and the media, but I can understand it and certainly won't criticize them, especially without knowing their reasoning.

[T-Shirt]

18 minutes ago, ttribe said:

Here's the whole paragraph:

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

Repeating myself, because you refuse to hear me, the IA department performed two audits of EPA; one in 2014 and 2017. If IA raised the issue with management in 'discussions,' the standard procedure would be to document this discussion in their workpapers and their report. The SEC pointed this out indicating they had access to the workpapers and reports of IA. IA in the Church reports to the First Presidency and the Presiding Bishopric. Based all my years of experience (25+) in accounting, auditing, and financial forensics, I would find the probability that these "discussions" were not documented in the audit files and not passed along to the First Presidency and Presiding Bishopric to be near zero.

 

 

I already posted all of this. I am not refusing to hear you. I respect your experience. Nevertheless, your comments go beyond the information that is actually provided. You said the SEC's report claims the CAD "highlighted" their concern in their report. It doesn't say this. I am not trying to say that none of your speculation happened, I am saying that many of the comments by you and others can not be substantiated by the actual words in the report.

Edited February 28, 2023 by T-Shirt

[ttribe]

1 minute ago, T-Shirt said:

I already posted all of this. I am not refusing to hear you. I respect your experience. Nevertheless, your comments go beyond the information is actually provided. You said the SEC's report claim the CAD "highlighted" their concern in their report. It doesn't say this. I am not trying to say that none of your speculation happened, I am saying that many of the comments by you and others can not be substantiated by the actual words in the report.

I am not merely speculating. I'm trying to explain how these processes work. It is not incumbent upon the SEC to provide every little detail. I am attempting, in good faith, to help people fill in the blanks. If IA had these "discussions" with EPA management and failed to include documentation of those discussions in their audit workpapers that could very well rise to the level of being a violation of professional standards.

[T-Shirt]

15 minutes ago, ttribe said:

I am not merely speculating. I'm trying to explain how these processes work. It is not incumbent upon the SEC to provide every little detail. I am attempting, in good faith, to help people fill in the blanks. If IA had these "discussions" with EPA management and failed to include documentation of those discussions in their audit workpapers that could very well rise to the level of being a violation of professional standards.

Yet, your filling in the blanks is still speculation and not actually stated in the report. I am not saying you are wrong, I am just trying to keep people focused on the actual words in the report. Speculation is fine as long as it is stated as such. I appreciate your experience and insight. Some posters have made some pretty wild accusations that they claim come from the report that just aren't there. I have shared very little of my opinions on the matter. One poster asked me if I had actually read the report. Yes, I have but after doing so, it appears to me that many of the posters making claims and charges have not read it because what they are saying isn't in it.

Edited February 28, 2023 by T-Shirt

[ttribe]

14 minutes ago, T-Shirt said:

Yet, your filling in the blanks is still speculation and not actually stated in the report.

Wow. Fine.

 

Edited February 28, 2023 by ttribe

[pogi]

32 minutes ago, T-Shirt said:

No, I have not stated this. I don't know for sure. I suspect that the report of the SEC is largely correct. It appears that the First Presidency, at the time, consisting of President Hinckley, Elder Monson and Elder Faust, wanted to keep the full portfolio's value hidden from, according to the SEC report, the "Street" and the "media". I don't really have a problem with this. Many have speculated as to why and I could come up with several legitimate reasons, but ultimately, we don't know why. I don't necessarily agree with hiding it from the public and the media, but I can understand it and certainly won't criticize them, especially without knowing their reasoning.

I think there are legitimate reasons for financial privacy.  I have always defended the church's financial privacy (for reasons I thought they were doing it) and their wealth.   I think, as Roger Clarke suggests, that there were likely several reasons why the church wanted financial privacy.  Some of those reasons were probably good legitimate reasons, but the one reason that Roger Clarke chose to highlight on-record with the Wall Street Journal is the troubling one for me.  

You suspect that the SEC report is largely correct.  Do you also think the on-record statement by the President of the EPA as to the motivations for wanting financial privacy are also correct?  Were those some of the "negative consequences" mentioned in the SEC article?

Edited February 28, 2023 by pogi

[bluebell]

26 minutes ago, ttribe said:

To be clear, you're okay with the Church agreeing to the publication of a document containing false allegations about the Church's conduct?

First, I don’t know that the church has any say in the publication of SEC orders. Does the church have the power to keep them from being published?

But leaving aside the issue of consent to publish, when the document itself states that the church does not agree to any allegations, it doesn’t bother me that they signed it as a part of the agreement.

Especially considering that there are multiple allegations made in the document, and the church might agree with some but not all.

 

[bluebell]

24 minutes ago, rockpond said:

Fair enough.

For me, I consider this to be the First Presidency admitting that they were trying to hid the value of the Church's investment portfolio (at least part of it).  I hope it will be followed up with comments from President Nelson to the members in General Conference and that more transparency will result.

I’m fine with the church not wanting to be transparent (I even support it to an extent), but I also think it’s fine if others disagree. 

[ttribe]

Just now, bluebell said:

First, I don’t know that the church has any say in the publication of SEC orders. Does the church have the power to keep them from being published?

But leaving aside the issue of consent to publish, when the document itself states that the church does not agree to any allegations, it doesn’t bother me that they signed it as a part of the agreement.

Especially considering that there are multiple allegations made in the document, and the church might agree with some but not all.

 

As I've explained earlier, the "neither admit nor deny" language is standard fare to get the issue settled out of court. I'm not implying that such language should be ignored, I'm pointing it out so you understand that this language is very common in settlements with the SEC; this settlement was not unusual in that regard.

Also, as I previously explained, it is also very common for drafts of press releases and final orders to go back and forth between the SEC's lawyers and the lawyers for the entity or persons being fined prior to their publication.

Do I have direct personal knowledge that drafts were exchanged in this case? Of course not. Would I be absolutely shocked if they weren't exchanged and much of the language actually negotiated with the SEC? Yes, I would. Very shocked, as a matter of fact.

[T-Shirt]

6 minutes ago, ttribe said:

Wow. Fine.

I edited my comment. You may or may not want to go back and read what I added.

[T-Shirt]

9 minutes ago, pogi said:

  Do yo ualso think the on-record statement by the President of the SEC as to the motivations for wanting financial privacy are also correct?  Were those some of the "negative consequences" mentioned in the SEC article?

Do you mean Ensign Peak?

[ttribe]

5 minutes ago, T-Shirt said:

I edited my comment. You may or may not want to go back and read what I added.

For the record, I am extremely careful to avoid anything considered to be speculation in court proceedings because I am regularly engaged to provide expert testimony. As an expert, I am called upon to provide insights based on not only the extant evidence in a case, but also my educational and professional degrees, credentials, and experience. Speculation, to me, is done when there is no evidence or expertise to back up a claim. I do not consider well informed opinions to be speculation. Your mileage may vary, of course.

[pogi]

2 minutes ago, T-Shirt said:

Do you mean Ensign Peak?

Yes, that is the second time I have done that!  All these dang acronyms (SEC, EPA, CAD).

[rockpond]

11 minutes ago, bluebell said:

I’m fine with the church not wanting to be transparent (I even support it to an extent), but I also think it’s fine if others disagree. 

That's a fair position.  But would you approve of the First Presidency knowingly violating SEC regulations to achieve that goal?  (I assume your answer is "no" but just want to clarify)

[bluebell]

50 minutes ago, ttribe said:

As I've explained earlier, the "neither admit nor deny" language is standard fare to get the issue settled out of court. I'm not implying that such language should be ignored, I'm pointing it out so you understand that this language is very common in settlements with the SEC; this settlement was not unusual in that regard.

 

Yep, I definitely get that.  From my perspective, that these kinds of statements are so common in settlement cases supports my views.

Quote

Also, as I previously explained, it is also very common for drafts of press releases and final orders to go back and forth between the SEC's lawyers and the lawyers for the entity or persons being fined prior to their publication.

Though I know we have nothing to go on to support that that happened in this case, it makes sense if it did.  It doesn't really mean anything though as far as our discussion on this issue.  That these letters are usually compromises between the government and a company acknowledges that under such conditions, no one gets the letter 100% their way.  

But all of that does not address whether or not the church has a say in whether or not a report is published at all.  I would guess that that is not something that is a part of the compromise. 

Edited February 28, 2023 by bluebell

[T-Shirt]

4 hours ago, pogi said:

You suspect that the SEC report is largely correct.  Do you also think the on-record statement by the President of the EPA [Ensign Peak] as to the motivations for wanting financial privacy are also correct?  Were those some of the "negative consequences" mentioned in the SEC article?

Here is the relevant part of the WSJ article:

Quote

 

Mr. Clarke said he believed church leaders were concerned that public knowledge of the fund’s wealth might discourage tithing.

“Paying tithing is more of a sense of commitment than it is the church needing the money,” Mr. Clarke said. “So they never wanted to be in a position where people felt like, you know, they shouldn’t make a contribution.”

 

The first sentence is not a quote but seems to indicate Clarke's opinion based on the use of the word "believed". The second paragraph includes actual quotes that I don't necessarily disagree with, it just depends on how you look at it. Ultimately, there is not enough information to know if any of what is stated comes from Church leadership or not. To me, it seems like he is sharing an opinion, but I don't know.

That being said let me see if I can share a thought on why I don't necessarily disagree with the thought. I have always been taught and have taught that paying tithing is never about the money but about a way that we can show devotion and sacrifice to the Lord and provides a way by which the Lord can richly bless us for that devotion and sacrifice. From personal experience, there are great blessings from paying tithing. I think what he is trying to say is that the Church doesn't want people missing out on the blessings of tithing because they feel the Church doesn't need their money. I think this is a little simplistic and maybe shows, at worst, a little lack of faith in members, but there are some who think like this. Additionally, the Church wants poor people in Africa to pay their tithing, not because they need it, but because of the blessings of prosperity they can miss by not paying it. The Church trusts the principle of tithing and wants all people to reap the blessings of it. I would be concerned if in newer developing parts of the Church, there were malcontents going about telling young branches of the Church not to pay tithing because the church is rich and doesn't need it. It would be kind of like overworked parents of teenagers hiring a maid service to come in while the kids are at school and the parents are at work to help relieve some of the burden but keeping it secret from the kids while still requiring them to clean their rooms because they don't want the kids to miss out on the character building part of being responsible for themselves. Agree or disagree, there is nothing sinister in it, just a love and desire for people to be blessed.

Ultimately, I don't know if this is just Clarke's opinion or something he heard from Church leadership but either way I don't view it as something negative but as something based on love, even though it may be stated awkwardly.

Edited March 1, 2023 by T-Shirt

[bluebell]

45 minutes ago, rockpond said:

That's a fair position.  But would you approve of the First Presidency knowingly violating SEC regulations to achieve that goal?  (I assume your answer is "no" but just want to clarify)

I'm not in support of anyone purposefully breaking laws in general.  Though sometimes I justify it for myself.  So that probably makes me a hypocrite to some extent.

[Teancum]

2 hours ago, T-Shirt said:

Another thing I was thinking about is the fine of one million dollars to the Church. Based on the number of 37.8 billion being the value of the Church's securities, according to the SEC report, the Church's fine would be the equivalent of fining the salary of a person earning $200,000.00 per year a total of $5.20, or the total fine of five million being equivalent to fining the same salary $26.00.

Frankly, that's not even a slap on the wrist, it's more like going through their furniture to find some spare quarters. 

It is not the money really.  It it how it appears to the members and the public.