On February 21, 2023, the US Securities and Exchange Commission (SEC) charged the Church of Jesus Christ of Latter-day Saints and its investment management company, Ensign Peak Advisors Inc, for their failure to disclose the Church’s $32 billion “secret” investment portfolio.
SEC Charges Mormon Church For Disclosure Failures & Misstated Filings
The SEC’s allegations state that the Church and Ensign Peak failed to file forms that would have revealed the Church’s equity investments, instead filing forms for shell companies that obscured the portfolio and misrepresented Ensign Peak’s control over the Church’s investment decisions. The SEC also noted that the violations had been happening since 1997 and continued until 2019.
The Church and Ensign Peak have agreed to settle the charges with the SEC. Ensign Peak has agreed to pay a $4 million penalty, and the Church has agreed to pay a $1 million penalty. The SEC also found that the Church had obscured its portfolio due to concerns over its public perception, which could lead to negative consequences.
The Church of Jesus Christ of Latter-day Saints is one of the largest religious denominations in the world, with millions of members around the globe. The SEC’s charges shock many in the Mormon community, who have long held up the Church as an example of financial prudence and transparency.
Members of the Church of Jesus Christ of Latter-day Saints are expected to donate 10% of their earnings and income to the church — also known as paying their tithes.
“We allege that the LDS Church’s investment manager, with the Church’s knowledge, went to great lengths to avoid disclosing the Church’s investments, depriving the Commission and the investing public of accurate market information. The requirement to file timely and accurate information on Forms 13F applies to all institutional investment managers, including non-profit and charitable organizations.”Gurbir S. Grewal, Director of the SEC’s Division of Enforcement