Mormon church, investment manager fined by SEC for lack of disclosure

The Church of Jesus Christ of Latter-day Saints and its investment arm, Ensign Peak Advisers, agreed to pay a total of $US5 million ($7.3 million) to settle a US regulator’s allegations that it failed to file proper disclosures and obscured the church’s massive investment portfolio.

“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,” Gurbir Grewal, enforcement director for the US Securities and Exchange Commission, said in a statement.

The church will pay $US1 million to settle the allegations, with Ensign Peak’s portion $US4 million.

The entity, commonly known as the Mormon church, and the investment arm didn’t admit to or deny the SEC’s allegations. The church said in a statement that it “regrets the mistakes made” and has taken steps to comply with SEC requirements.

The Wall Street Journal earlier this month reported that the church was under SEC investigation.

The SEC alleged that Ensign Peak failed to file the required forms, known as Form 13Fs, in Ensign Peak’s name, which would have disclosed the church’s investments to the public. Instead, the church and the investment manager created 13 limited-liability corporations to obscure the church’s portfolio, the regulator alleged.

Investments in Apple, Microsoft

The church had knowledge of and approved this tactic, the SEC said. The agency expressed concern about the reporting structure in June 2019, according to the church, and soon after Ensign Peak began filing a single report. Ensign Peak disclosed in its Form 13F that it managed more than $US44 billion, with its biggest equity investments in Apple and Microsoft, at the end of 2022.