Religious institutions in the United States have special status, as they are both nonprofit organizations and 501(c)(3) tax-exempt entities. However, this does not give them free rein to do whatever they please. The Church of Jesus Christ of Latter-day Saints and its nonprofit entity Ensign Peak Advisors is finding this out the hard way.
The Securities and Exchange Commission released an order on Tuesday fining the Mormon Church $5 million. The SEC alleges that from 1997 to 2019, it hid its investment portfolios behind multiple shell companies.
These allegations first came to light in 2018. A group then named MormonLeaks was formed. It has since been renamed the Truth and Transparency Foundation. This group claimed the church had investments worth $32 billion. A 2020 Wall Street Journal report cited a whistleblower who claims the investments were even bigger and worth $100 billion.
The director of the SEC’s Division of Enforcement, Gurbir S. Grewal, believes that no organization is above the law. “The requirement to file timely and accurate information on Forms 13F applies to all institutional investment managers, including non-profit and charitable organizations,” Grewal said.
The Mormon Church claims to have followed bad advice and is working to remedy it. The church "received and relied upon legal counsel regarding how to comply with its reporting obligations while attempting to maintain the privacy of the portfolio. Ensign Peak and the Church believe that all securities required to be reported were included in the filings by the separate companies.” It now sees the error of its ways and reports with a single filing. The church is eager to move on.
"This settlement relates to how the forms were filed previously,” the church explained in a statement. "Ensign Peak and the Church have cooperated with the government over a period of time as we sought resolution. We affirm our commitment to comply with the law, regret mistakes made, and now consider this matter closed."
To learn more about this matter, watch this video.
