Church fined by SEC

[LoudmouthMormon]

32 minutes ago, Analytics said:

I work in the insurance industry and my main job is to continually evaluate the solvency of my company and communicate the results of my analysis to regulatory agencies. Because insurance companies are regulated at the state level, I need to respond to requests from up to 50 state regulatory agencies, in addition to federal regulators, independent auditors, and auditors from partner companies. 

I can appreciate the breadth and depth of experience and relevant information you bring to this discussion.  Could I ask a question on the moral/ethical face of things?  In your experience, as you work to fulfill requests from all these different agencies and institutions, what percentage of requirements dealt with are, in your opinion, a moral/ethical good requirement?  In other words, how often do you think to yourself as you work to meet a requirement something like  this:

"I'm grateful the govt has this law/policy/procedure/hurdle in place, it was obviously put there for a reason because it benefits society, and I can see the good it brings, or the harm that would result if it were not in place."

I'd be interested in anecdotes, if you could share them.

As I've mentioned previously, I worked one tax season at one of the major chain tax prep companies.  I came away with many anecdotes about the nature of the work I did.  Many were positive: My office regularly helped folks lower their tax burden, increase their refunds, even pull money out of the past as we audited their taxes from 2-4 years ago.  I saw a struggling poor family of 8, actively engaged in the foster parent system, hit that "tax welfare sweet spot" of income-and-dependents, that resulted in a $6-7000 refund.  Their response was "now we can finally afford to get everyone new clothes and maybe throw a group birthday party for everyone."   I saw a very interesting couple, with a history of drug abuse and incarceration, who had met in rehab and had been working to be honest citizens for years, check the final box off their amends list of "get current on our taxes so we're both legal".  We married them there at the tax desk so they could file jointly, and we filed 5-7 years of back taxes for them both, which ended up only costing them like $250 for the whole package - a small price to pay for a decade of hiding from taxes.  

I also saw a few negative, even horrible things.   I was forced to apply the "you don't have healthcare" penalty two or three times, every time was to struggling lower income folks, making too much money to qualify for the exemption, but not having good enough employment to be able to afford health insurance.  More than one divorced taxpayer burst into tears upon hearing an ex had found a surprising way to shaft them in the areas of deducting alimony or claiming dependents.   I saw half a dozen smart bad guys, obviously working the system and lying to us to hit the abovementioned sweet spot.  Using us to add legitimacy to their claim and defend them should the IRS question things, relying on the almost zero chance they'd ever be audited, and understanding what paid tax preparers can and can't do. (We can only go off of what we see, and we can't act on "this guy is shady as hell".  Some of those folks will file multiple, even 5 or more sets of taxes every year, pulling down $4k or more per set of taxes.) 

So yeah, @Analytics, you work in the biz, you tell me, how much of your job involves happily interfacing with a govt agency acting as a paragon of virtue and justice, and how often do you see soul-crushingly pointless or negative bureaucracy that serves no purpose, or even has a negative impact?

[Kenngo1969]

On 3/11/2023 at 5:45 PM, Stargazer said:

LOL, who is that? My name is Mike Clark. Ask @MorningStar or @Bernard Gui, I know them personally.

ETA: I can feel free to give my IRL name because it's so generic it is virtually anonymous. Look up Mike Clark in the New York City phone book. There are pages of them.

There may be many, many "Mike Clarks," but there is only one "you"!   And however many other "Mike Clarks" there are, unless your parents pulled some kind of a stunt by having twins and deciding, sadistically, to name both of you "Mike Clark," no one is exactly like you!   (Things could be worse: You could be "John Jones," "John Smith," etc.!)

[rodheadlee]

On 6/10/2023 at 8:57 AM, LoudmouthMormon said:

I can appreciate the breadth and depth of experience and relevant information you bring to this discussion.  Could I ask a question on the moral/ethical face of things?  In your experience, as you work to fulfill requests from all these different agencies and institutions, what percentage of requirements dealt with are, in your opinion, a moral/ethical good requirement?  In other words, how often do you think to yourself as you work to meet a requirement something like  this:

"I'm grateful the govt has this law/policy/procedure/hurdle in place, it was obviously put there for a reason because it benefits society, and I can see the good it brings, or the harm that would result if it were not in place."

I'd be interested in anecdotes, if you could share them.

As I've mentioned previously, I worked one tax season at one of the major chain tax prep companies.  I came away with many anecdotes about the nature of the work I did.  Many were positive: My office regularly helped folks lower their tax burden, increase their refunds, even pull money out of the past as we audited their taxes from 2-4 years ago.  I saw a struggling poor family of 8, actively engaged in the foster parent system, hit that "tax welfare sweet spot" of income-and-dependents, that resulted in a $6-7000 refund.  Their response was "now we can finally afford to get everyone new clothes and maybe throw a group birthday party for everyone."   I saw a very interesting couple, with a history of drug abuse and incarceration, who had met in rehab and had been working to be honest citizens for years, check the final box off their amends list of "get current on our taxes so we're both legal".  We married them there at the tax desk so they could file jointly, and we filed 5-7 years of back taxes for them both, which ended up only costing them like $250 for the whole package - a small price to pay for a decade of hiding from taxes.  

I also saw a few negative, even horrible things.   I was forced to apply the "you don't have healthcare" penalty two or three times, every time was to struggling lower income folks, making too much money to qualify for the exemption, but not having good enough employment to be able to afford health insurance.  More than one divorced taxpayer burst into tears upon hearing an ex had found a surprising way to shaft them in the areas of deducting alimony or claiming dependents.   I saw half a dozen smart bad guys, obviously working the system and lying to us to hit the abovementioned sweet spot.  Using us to add legitimacy to their claim and defend them should the IRS question things, relying on the almost zero chance they'd ever be audited, and understanding what paid tax preparers can and can't do. (We can only go off of what we see, and we can't act on "this guy is shady as hell".  Some of those folks will file multiple, even 5 or more sets of taxes every year, pulling down $4k or more per set of taxes.) 

So yeah, @Analytics, you work in the biz, you tell me, how much of your job involves happily interfacing with a govt agency acting as a paragon of virtue and justice, and how often do you see soul-crushingly pointless or negative bureaucracy that serves no purpose, or even has a negative impact?

This is me singing"look out mama there's a white boat coming up the River" "it don't look like he's here to deliver the mail".....Powder finger by Neil Young 

That's my anecdote for the day.

Edited June 12, 2023 by rodheadlee

[Analytics]

On 6/10/2023 at 10:57 AM, LoudmouthMormon said:

So yeah, @Analytics, you work in the biz, you tell me, how much of your job involves happily interfacing with a govt agency acting as a paragon of virtue and justice, and how often do you see soul-crushingly pointless or negative bureaucracy that serves no purpose, or even has a negative impact?

In my experience and industry I’d give the regulators a B+, or maybe even an A-. 

As an anecdote, in the Summer of 2017 GE announced to Wall Street that it was going to reevaluate its long term care insurance assumptions. Wall Street’s basic reaction was, “what do you mean you are reviewing these assumptions? We thought you existed that business when you spun off Employer’s Reinsurance and Genworth?!”

A few months later in January 2018, GE announced the result of this review was an $8 billion increase in its GAAP reserves, offset by an immediate $8 billion charge to earnings. Furthermore, it needed to increase its statutory reserves by $14.5 billion, which resulted in a 50% decrease in GE’s dividends and an SEC investigation.

In theory, this should have caused GE’s market capitalization to go down by $8 billion. Instead, it caused the market capitalization to go down by something on the order of $100 billion. But why?

The short answer is that the stock market lost confidence that GE was being transparent with investors. If GE never saw fit to disclose to investors that it still had a huge and risky portfolio of LTC liabilities, what other risks was it hiding?

The SEC swiftly launched an investigation that resulted in GE paying a $200 million settlement. I can tell you that even though the settlement contained the same no-admission-of-guilt language as in the Church’s settlement, the executives at GE knew that they were guilty and that they got off cheap. I can also say that while I might quibble with a couple of details in the SEC’s report, they got the bulk of it right.

The reason I share this example is because it illustrates the real value the SEC adds to our economy. The SEC was created as part of the Securities Exchange Act of 1934. The main point of the legislation is to mandate that public companies be transparent so that investors can trust the reports companies publicly release. With this trust and transparency, people can buy stocks with confidence. This Act, the resulting transparency, and the SEC’s subsequent enforcement have released the brakes on the ability of U.S. companies to raise capital because it causes investors to be able to trust company reports. Losing some of that confidence cost GE $100 billion in value.

I served my mission in Argentina 35 years ago after studying economics in college for a year. I became obsessed with why the U.S. economy had grown and thrived over the prior century, and the Argentine economy had stagnated. When you look at the people and natural resources of these two countries, it isn’t obvious why America has done so much better.

Two of the reasons America has done better are 1- because investors trust the American government not to screw businesses and 2- because investors in America trust corporations to be honest and transparent with the public. A well-run, rational, and non-corrupt SEC has done spectacular things for our economy.

Anybody who feels a sense of reverence for capitalism because it has created so much wealth and alleviated so much poverty should extend some of that reverence to the SEC.

[LoudmouthMormon]

Thank you for the honest and interesting answer @Analytics.

29 minutes ago, Analytics said:

The SEC was created as part of the Securities Exchange Act of 1934. The main point of the legislation is to mandate that public companies be transparent so that investors can trust the reports companies publicly release. With this trust and transparency, people can buy stocks with confidence. This Act, the resulting transparency, and the SEC’s subsequent enforcement have released the brakes on the ability of U.S. companies to raise capital because it causes investors to be able to trust company reports. Losing some of that confidence cost GE $100 billion in value.

29 minutes ago, Analytics said:

Two of the reasons America has done better are 1- because investors trust the American government not to screw businesses and 2- because investors in America trust corporations to be honest and transparent with the public. A well-run, rational, and non-corrupt SEC has done spectacular things for our economy.

That makes sense to me, and I really appreciate your thoughts on US vs Argentina.  What also makes sense to me however, is the notion that tithe payers consecrate their funds to the church in faith, believing they're doing what God wants of them.  I'm not investing for a return, I'm not donating with any expectations whatsoever.  As I think through some sort of horror scenario where the news says one day, I dunno, something like "four leaders of the LDS church convicted in multibillion dollar money laundering scheme" or whatever, I don't think it would dent my belief in the principle of tithing.  I would assume the church would take action to correct the problem, and I'd continue happily contributing without interruption.  Because what I get out of it, are the blessings of obedience to the principle.  If some other mormon down the line abuses the work for personal gain (or whatever), it's truly no skin off my nose.

Edited June 12, 2023 by LoudmouthMormon

[Analytics]

You’re welcome, @LoudmouthMormon

As one more anecdote, insurance regulators seek a balance between conflicting mandates. They want insurers to stay solvent, but also want them not to  charge premiums that are too high. And this gets back to the point that an insurance company’s surplus can be too high—having margins and safety nets that are too high is an inefficient allocation of resources.

A poorly run company was called Penn Treaty. While their bankruptcy was primarily their own fault because of their very lax underwriting, well-meaning (but dare I say incompetent) regulators deserve some of the blame. Penn Treaty needed to increase the premiums on their LTC policies, but the Pennsylvania regulators didn’t let them do so. Because of that, the company ran out of money and couldn’t pay its insurance claims.

In general, regulators have learned from that experience and are now more informed and fair when they receive premium increase requests. And even though it is a pain in the butt for me to file rate increase requests, I’m glad the process is in place and that there are powerful allies to represent consumer interests when companies try to maximize profits (or minimize losses) on insurance portfolios.

Edited June 12, 2023 by Analytics

[ttribe]

Yesterday, I sat in on a panel discussion involving various fraud risks related to cryptocurrency. Amongst the panelists was Commissioner Hester Peirce. Perhaps after the discussion, I should have cornered her and shared SMac's concerns regarding the alleged ineptitude of the SEC's investigations and enforcement staff. I'm sure she would have run right back to D.C. to set things straight!

[Stargazer]

On 6/10/2023 at 5:42 PM, Kenngo1969 said:

There may be many, many "Mike Clarks," but there is only one "you"!   And however many other "Mike Clarks" there are, unless your parents pulled some kind of a stunt by having twins and deciding, sadistically, to name both of you "Mike Clark," no one is exactly like you!   (Things could be worse: You could be "John Jones," "John Smith," etc.!)

Yes, there is only one "me". Good luck finding "me", however! 

[Tacenda]

I heard that Kirton and McConkie gets calls everyday or every hour maybe, of a child sex abuse situation. I guess the church can cover it, when people sue. But there's got to be a better way. Oh, I have an idea, tell the bishops to call the police, duh church.

[The Nehor]

10 minutes ago, Tacenda said:

I heard that Kirton and McConkie gets calls everyday or every hour maybe, of a child sex abuse situation. I guess the church can cover it, when people sue. But there's got to be a better way. Oh, I have an idea, tell the bishops to call the police, duh church.

Would that lead to a better outcome? In some cases yes. In others likely little or nothing will happen.

[Kenngo1969]

2 hours ago, Stargazer said:

Yes, there is only one "me". Good luck finding "me", however! 

I bet I could do it, if I really set my mind to it.*  (Hey, that rhymes! )  After all, I know some of the very same people you know, in real life, even!   But don't worry: I won't ask you to surrender your anonymity if'n ya don't wanna!  (You seem like a really nice guy and like my kind of people ... ummm, person, though: I bet [if I were a betting man] we'd hit right it off!)

*That reminds me of this.  Please forgive the romantic overtones! (Great song, though, no????  When I went looking for this is the first time I've ever seen the video, and it, too, is very well done.)

 

 

[Calm]

4 hours ago, Tacenda said:

I heard that Kirton and McConkie gets calls everyday or every hour maybe, of a child sex abuse situation.

I would hope not, but if you are talking about abuse within families and not just accused leaders, it would not surprise if daily.  Domestic abuse is too common in our society.

However, what is your source?  Is this speculation or someone with relevant experience?  Anonymous or named reporting firsthand knowledge.

Edited June 15, 2023 by Calm

[Tacenda]

3 hours ago, Calm said:

I would hope not, but if you are talking about abuse within families and not just accused leaders, it would not surprise if daily.  Domestic abuse is too common in our society.

However, what is your source?  Is this speculation or someone with relevant experience?  Anonymous or named reporting firsthand knowledge.

I listened to a podcast with John & Margie Dehlin who were interviewing the daughters of an Ensign Peak investment advisor. And John brought it up that he was told that. BTW, he has several employees of the church that talk to him secretly about the goings on, so he couldn't share a source I guess. 

 

[Calm]

40 minutes ago, Tacenda said:

I listened to a podcast with John & Margie Dehlin who were interviewing the daughters of an Ensign Peak investment advisor. And John brought it up that he was told that. BTW, he has several employees of the church that talk to him secretly about the goings on, so he couldn't share a source I guess. 

 

John lies a lot imo.  

Edited June 15, 2023 by Calm

[ttribe]

3 hours ago, Tacenda said:

I listened to a podcast with John & Margie Dehlin who were interviewing the daughters of an Ensign Peak investment advisor. And John brought it up that he was told that. BTW, he has several employees of the church that talk to him secretly about the goings on, so he couldn't share a source I guess. 

 

John embellishes. A lot. Take these kinds of things with a grain of salt.

[ksfisher]

11 hours ago, Tacenda said:

Oh, I have an idea, tell the bishops to call the police, duh church.

I think this would actually have the opposite effect that you hope.  I've made this point several times before, but don't you think that if bishops reported everything that was confessed to them (re abuse) that there would be fewer people confessing to them?  If a perpetrator knew that his confession to a bishop would land him in jail the last person he would tell would be a bishop.

Under the current system where a confession to clergy is privileged communication then at least the bishop has the opportunity to encourage the perpetrator to turn themselves in to the police. 

I really think that changes to this would result in fewer abuse reports.

[bluebell]

26 minutes ago, ksfisher said:

I think this would actually have the opposite effect that you hope.  I've made this point several times before, but don't you think that if bishops reported everything that was confessed to them (re abuse) that there would be fewer people confessing to them?  If a perpetrator knew that his confession to a bishop would land him in jail the last person he would tell would be a bishop.

Under the current system where a confession to clergy is privileged communication then at least the bishop has the opportunity to encourage the perpetrator to turn themselves in to the police. 

I really think that changes to this would result in fewer abuse reports.

Not to mention, I think in some states, it’s illegal for the bishop to report a clergy confession. So reporting it would make it more difficult for the prosecutor to do anything. The report would be in admissible in court. 

[MrShorty]

I have mixed and complicated feelings about clergy-penitent privilege. I think I can sum my feelings up like this. A church that is going to invoke clergy-penitent privilege when it comes to confessions of abuse, that church had better be extraordinarily confident in their ability to stop current abuse and prevent the confessor from abusing someone in the future. If perpetrators are confessing to abuse and the abuse continues or they manage to find future victims, the number of those confessions doesn't really matter. Number of confessions doesn't matter if the abuse is allowed to continue. As I see it, a huge part of the problems with the Arizona case is that the abuse continued after the bishop became aware of it. There's a lot of nuance and discussion that we've had around that, but, at the end of the day, we invoked clergy-penitent privilege and the abuse continued. In any case where we (we meaning the church and its leaders and its advisors and its members) do not feel extraordinarily confident that we can stop current abuse and prevent future abuse, we ought to turn that case over to the state.

Turning a case over the state is no guarantee that abuse will stop. I've been really bothered by the recent Gandhi murder suicide case in Utah, because the mother and ex-wife (and non-custodial parent) has allegedly been telling the courts for some time about concerns with her ex-husband and him having full custody. Somehow the courts were unable to see the murder-suicide potential here and tragedy occurred.

At the end of the day, even with the cases where the state has failed, I'm inclined to say that a church should only invoke clergy-penitent privilege when it is extraordinarily confident in its ability to stop the abuse and prevent future abuse. I feel like I'm setting the bar high, and that may have a chilling effect on confessions to clergy, but I just don't think I can feel good about having more confessions if confession does not consistently and reliably lead to stopping and preventing abuse.

[Tacenda]

1 hour ago, ksfisher said:

I think this would actually have the opposite effect that you hope.  I've made this point several times before, but don't you think that if bishops reported everything that was confessed to them (re abuse) that there would be fewer people confessing to them?  If a perpetrator knew that his confession to a bishop would land him in jail the last person he would tell would be a bishop.

Under the current system where a confession to clergy is privileged communication then at least the bishop has the opportunity to encourage the perpetrator to turn themselves in to the police. 

I really think that changes to this would result in fewer abuse reports.

Right, I do see that I was quick to post. But hopefully bishops do urge members or victims to go to the police. It use to not be the case mostly and would be all hush hush. Maybe it's gotten much better.

[ksfisher]

37 minutes ago, Tacenda said:

It use to not be the case mostly and would be all hush hush.

I would challenge that idea.  I don't doubt that in some cases people decided to handle things "in house" so to speak, but I would disagree that that was more than a small minority of the cases.  Unfortunately, it's usually the small minority of poorly handled incidents that make the news rather than all the ones that were handled properly.

[Kenngo1969]

When I was in law school, we were discussing a Utah case in which, somehow, the confessional veil had been pierced.  (I'd love to know which one, because, now, out of simple curiosity, I'd love to re-read it, but I don't remember: Sorry. )  Our professor said, "Moral of the story?  Confess to God, not to your bishop! "

[Tacenda]

Okay ya'll, I was just thinking in my mind that my husband's and I's bank account is a very small nest egg. We did recently open up a certificate of deposit. But was thinking the rest is just sitting there and we do have a 401 k as well that goes up and down depending. 

Thinking the church should help a poor couple out here and give money advice to it's members. Do they display where they invest I wonder, lazy learner here. I guess with that pile of money it balloons almost flawlessly. But we don't have that kind of money laying around. 

Is there websites that help, or give safe places to invest. I recently saw a place where you can be part of a large family like group and own real estate as low as $500 to begin with. 

We can't all be like the church and be the 5th largest land owner in the nation. 

[Calm]

12 minutes ago, Tacenda said:

Okay ya'll, I was just thinking in my mind that my husband's and I's bank account is a very small nest egg. We did recently open up a certificate of deposit. But was thinking the rest is just sitting there and we do have a 401 k as well that goes up and down depending. 

Thinking the church should help a poor couple out here and give money advice to it's members. Do they display where they invest I wonder, lazy learner here. I guess with that pile of money it balloons almost flawlessly. But we don't have that kind of money laying around. 

Is there websites that help, or give safe places to invest. I recently saw a place where you can be part of a large family like group and own real estate as low as $500 to begin with. 

We can't all be like the church and be the 5th largest land owner in the nation. 

The way an individual or small family should invest is NOT the way a large, wealthy organization invests. 

[Stormin' Mormon]

10 minutes ago, Calm said:

The way an individual or small family should invest is NOT the way a large, wealthy organization invests. 

Waaaaaay back on pages 1 and 2 of this very thread, we had some discussions about this very thing.  I guess if a thread goes on long enough, it's inevitable that it'll loop around to the point it started from.  

[ttribe]

1 hour ago, Tacenda said:

Okay ya'll, I was just thinking in my mind that my husband's and I's bank account is a very small nest egg. We did recently open up a certificate of deposit. But was thinking the rest is just sitting there and we do have a 401 k as well that goes up and down depending. 

Thinking the church should help a poor couple out here and give money advice to it's members. Do they display where they invest I wonder, lazy learner here. I guess with that pile of money it balloons almost flawlessly. But we don't have that kind of money laying around. 

Is there websites that help, or give safe places to invest. I recently saw a place where you can be part of a large family like group and own real estate as low as $500 to begin with. 

We can't all be like the church and be the 5th largest land owner in the nation. 

Don't do that. Work with a qualified advisor who understands your personal needs. Your risk tolerance is far, far different than a multi-billion-dollar investment fund.