Church fined by SEC

[Analytics]

6 minutes ago, bluebell said:

So does the SEC not fine (or whatever the proper term would be) for lying on forms?  Is lying not illegal or something the SEC can get a company in trouble for?

That probably sounds like a dumb question but I'm trying to figure out how EP was found in violation of not filing a form but not held accountable for lying on the forms (per Analytics analysis)?  Isn't that perjury?  Does the SEC not deal with issues of perjury?

The SEC's term for "lying" is "misstating", and that is one of the things they were sanctioned for:

36. As a result of the conduct described above, Ensign Peak violated Section 13(f)(1) of the Exchange Act and Rule 13f-1 thereunder by failing to file Forms 13F in Ensign Peak’s name. Ensign Peak also violated Section 13(f)(1) of the Exchange Act and Rule 13f-1 thereunder by filing misstated Forms 13F in the names of LLCs created for the sole purpose of filing Forms 13F.

37. As a result of the conduct described above, the Church caused Ensign Peak’s violations of Section 13(f)(1) of the Exchange Act and Rule 13f-1 thereunder.

Edited February 21, 2023 by Analytics

[bsjkki]

IMO, I think the church wanted to keep its investments private but once the investments grew to a point that the reporting rules kicked in, tried to find a legal way to keep things private and failed. They should have let the llc’s make decisions and then it would have been fine. I actually can understand why they would want their investments private.
 

Currently arguing with someone who believes this was ‘money laundering’ and ‘tax evasion.’ It’s a field day out there. 

Edited February 22, 2023 by bsjkki

[pogi]

52 minutes ago, provoman said:

What do believe the transparency would provide, that is not provided at this time?

I think he was speaking of the illegal concealment which is not a problem "at this time".  But to answer your question in regards to what happened:

Honesty, perhaps?

Quote

Lying is intentionally deceiving others.

When we speak untruths, we are guilty of lying. We can also intentionally deceive others by a gesture or a look, by silence, or by telling only part of the truth. Whenever we lead people in any way to believe something that is not true, we are not being honest

https://www.churchofjesuschrist.org/study/manual/gospel-principles/chapter-31-honesty?lang=eng

If  it is true that part of the reason they intended to conceal these portfolios was to mislead members by not being transparent as the law required, which might have motivated some to not pay tithing anymore, then that is "not being honest", according to the church's own teachings.   Beyond the misleading misstatements that they are accused of by the SEC, they are intentionally misleading members in order to motivate obedience.  That doesn't sit well with me at all.  

Edited February 21, 2023 by pogi

[ttribe]

9 minutes ago, bsjkki said:

IMO, I think the church wanted to keep its investments private but once the investments grew to a point that the reporting rules kicked in, tried to find a legal way to keep things private and failed. They should have let the llc’s make decisions and then it would have been fine. I actually can understand why they would want there investments private.
 

Currently arguing with someone who believes this was ‘money laundering’ and ‘tax evasion.’ It’s a field day out there. 

That is someone who understands neither of those phrases as they do not apply to this situation in any way I can reasonably discern at this point.

Edited February 21, 2023 by ttribe

[SteveO]

2 minutes ago, ttribe said:

From the Order -

"As referenced in this Order, “senior leadership of the Church” consists of the Church’s First Presidency and Presiding
Bishopric." (emphasis mine)

"8. To prevent disclosure of the securities portfolio managed by Ensign Peak, the
Church approved Ensign Peak’s plan of using other entities, instead of Ensign Peak, to file Forms
13F. The Church was concerned that disclosure of the assets in the name of Ensign Peak, a known
Church affiliate, would lead to negative consequences in light of the size of the Church’s portfolio.
Ensign Peak did not have the authority to implement this approach without the approval of the
Church’s First Presidency." (emphasis mine)

 

But what does the bold mean?  Did the first presidency tell them to come up with a plan and assume what was presented was legal and kosher?  
 

Did the first presidency say, “do whatever you guys need to do to keep our holdings out of the public eye” and just assume Ensign Peak would do the right thing?

Its just a tough pill to swallow that President Nelson signed off on a plan knowing it was at best legal questionable.

[ttribe]

1 minute ago, SteveO said:

But what does the bold mean?  Did the first presidency tell them to come up with a plan and assume what was presented was legal and kosher?  
 

Did the first presidency say, “do whatever you guys need to do to keep our holdings out of the public eye” and just assume Ensign Peak would do the right thing?

Its just a tough pill to swallow that President Nelson signed off on a plan knowing it was at best legal questionable.

I can't speak to the specifics of how. I can only point out that the SEC specifically identifies the First Presidency as having known about and approved of multiple steps in the scheme. Again, I recommend reading the entire order: https://www.sec.gov/litigation/admin/2023/34-96951.pdf

[The Nehor]

6 minutes ago, bsjkki said:

Currently arguing with someone who believes this was ‘money laundering’ and ‘tax evasion.’ It’s a field day out there. 

I bet that person has no idea what either term actually means.

[bluebell]

Just now, ttribe said:

To be clear, they were charged with not filing the forms in Ensign Peak's name. That's the lie.

Analytics implied there was a lot more that they lied about.  But maybe I'm just not understanding him.

So if I'm understanding you, EP lied and perjured themselves by purposefully putting an incorrect name on a form in an attempt to deceive the SEC?

[ttribe]

2 minutes ago, bluebell said:

Analytics implied there was a lot more that they lied about.  But maybe I'm just not understanding him.

So if I'm understanding you, EP lied and perjured themselves by purposefully putting an incorrect name on a form in an attempt to deceive the SEC?

That's the violation of the law, yes. The Order also specifically states that the Church "caused" EP to engage in the violation.

[bluebell]

10 minutes ago, bsjkki said:

Currently arguing with someone who believes this was ‘money laundering’ and ‘tax evasion.’ It’s a field day out there. 

This doesn't surprise me at all.   

[SteveO]

4 minutes ago, ttribe said:

I can't speak to the specifics of how. I can only point out that the SEC specifically identifies the First Presidency as having known about and approved of multiple steps in the scheme. Again, I recommend reading the entire order: https://www.sec.gov/litigation/admin/2023/34-96951.pdf

Well…I’m gonna say it…

Church’s response is inadequate and I think we need more information 

[bluebell]

Just now, ttribe said:

That's the violation of the law, yes. The Order also specifically states that the Church "caused" EP to engage in the violation.

So the violation is actually the lie and not an issue of not filing the correct form.  If they had filled out the exact same forms exactly the same way but used a different name then they would have been fine?

[SteveO]

9 minutes ago, bluebell said:

So the violation is actually the lie and not an issue of not filing the correct form.  If they had filled out the exact same forms exactly the same way but used a different name then they would have been fine?

I even think “lie” and “lying” are kind of too strong descriptors.

[Calm]

https://publicsquaremag.org/faith/church-state/ensign-peak-clarifying-the-sec-announcement/

[bluebell]

9 minutes ago, SteveO said:

I even think “lie” and “lying” are kind of too strong descriptors.

I tend to agree.  The SEC seems very comfortable with charging businesses and companies for making false and/or misleading statements in other cases where the intent to deceive was clear.  It seems telling to me that they did not charge the EP or the church with that in this case.

It seems that some want to suggest that when the SEC uses the word 'misstated' they actually mean lying, but that's not at all clear to me.  In other cases where it was proven that a company had the intent to deceive, they use the term "lying" freely in the charges and the findings.

But they did not use those terms in this finding.

Edited February 22, 2023 by bluebell

[ttribe]

20 minutes ago, bluebell said:

So the violation is actually the lie and not an issue of not filing the correct form.  If they had filled out the exact same forms exactly the same way but used a different name then they would have been fine?

Well, to be clear, the Church (through EP) created 13 entities with 13 different names, 13 different addresses, and 13 different 'managers' and filed reports swearing that they were 13 independent investment entities when, in fact, they were not. They were all managed by EP.

[bluebell]

8 minutes ago, Calm said:

https://publicsquaremag.org/faith/church-state/ensign-peak-clarifying-the-sec-announcement/

That seems fairly straight forward.  @ttribe, what in that piece do you find inaccurate?  (not a gotcha, sincerely want to know where you would disagree).

[bluebell]

4 minutes ago, ttribe said:

Well, to be clear, the Church (through EP) created 13 entities with 13 different names, 13 different addresses, and 13 different 'managers' and filed reports swearing that they were 13 independent investment entities when, in fact, they were not. They were all managed by EP.

But the SEC doesn't seem to find anything wrong with any of that, correct?  The only issue is that they were all managed by EP and that wasn't allowed?

[ttribe]

1 minute ago, bluebell said:

That seems fairly straight forward.  @ttribe, what in that piece do you find inaccurate?  (not a gotcha, sincerely want to know where you would disagree).

I don't specifically disagree with any of it. I do find some of the explanations a little self-serving, but it is accurate. It would be foolish for the Church to issue any statement that was inaccurate at this point.

[california boy]

2 hours ago, SteveO said:

https://markets.businessinsider.com/news/stocks/mormon-church-stock-portfolio-top-10-holdings-ensign-peak-advisors-2023-2?amp
 

https://www.yahoo.com/now/mormon-church-15-biggest-stock-195558119.html

https://fintel.io/i/ensign-peak-advisors-inc
 

https://whalewisdom.com/filer/ensign-peak-advisors-inc

https://stockzoa.com/fund/ensign-peak-advisors-inc/

https://wallmine.com/fund/4f5/ensign-peak-advisors-inc.amp

https://www.nasdaq.com/market-activity/institutional-portfolio/ensign-peak-advisors-inc-798919

Thanks for the information.  It looks like they got that information from a 13F filing.  Didn't the Church always file a 13F??  And haven't they been filing a 13F on all of their stock holdings since 2019? That would indicate to me that the Church has been revealing their investments for some time now.  Is there a huge problem with Church members mirroring those investments since 2019?

[ttribe]

2 minutes ago, bluebell said:

But the SEC doesn't seem to find anything wrong with any of that, correct?  The only issue is that they were all managed by EP and that wasn't allowed?

They find something wrong with all of it, as it stands as the basis for the charge of violating a specific law, which is reporting an entity as being independent when it isn't. It was an intentional act and the SEC says as much. This wasn't a minor technicality, it was an intentional effort to conceal information from regulators.

Edited February 22, 2023 by ttribe

[california boy]

1 hour ago, pogi said:

I think the church is less concerned about people copying their investments and blaming them in troubled financial times, and more concerned about this:

Quote

 

Roger Clarke, who leads Ensign Peak, has said that part of the reason the Church sought to conceal its wealth was to ensure continued tithing by believers.

https://finance.yahoo.com/finance/news/mormon-church-hid-32-billion-182800651.html
https://qz.com/the-mormon-church-hid-32-billion-in-shell-companies-1850140376

 

Along with criticisms for not giving enough to charity if people knew how much they had.  

Deeply troubling if this is an accurate quote from Roger Clarke.  

That seems more likely the case.  This mirroring issue seems to be more an excuse than a problem.

[webbles]

41 minutes ago, SteveO said:

Its just a tough pill to swallow that President Nelson signed off on a plan knowing it was at best legal questionable.

The plan was initially set up under President Hinckley and then further changed under President Monson.  President Nelson became the prophet in 2018 which is when the SEC says that the LLCs were discovered by some entity (it doesn't sound like the whistleblower).  So we don't know how much of this was known or approved by President Nelson as he was never in the First Presidency during the majority of the time before it was caught.

[webbles]

14 minutes ago, ttribe said:

Well, to be clear, the Church (through EP) created 13 entities with 13 different names, 13 different addresses, and 13 different 'managers' and filed reports swearing that they were 13 independent investment entities when, in fact, they were not. They were all managed by EP.

They also picked 'managers' with common names so it would make it harder to search for them.

[Analytics]

6 minutes ago, bluebell said:

But the SEC doesn't seem to find anything wrong with any of that, correct?  The only issue is that they were all managed by EP and that wasn't allowed?

I think they have a problem with all of that, because the reason they did all of those things was to deceive the SEC and the public.