Feb. 21 (UPI) -- The U.S. Securities and Exchange Commission announced Tuesday it has settled charges with the Church of Jesus Christ of Latter-day Saints, as well as its financial adviser.
The SEC charged both the Mormon Church and its non-profit financial investment firm Ensign Peak Advisers with "failing to file forms that would have disclosed the church's equity investments, and for instead filing forms for shell companies that obscured the church's portfolio," the agency said in a statement.
It also contends the church knowingly concealed the extent of Ensign Peak's control over its investment decisions.
The illicit activity allegedly occurred between 1997 and 2019, according to the SEC filing.
To settle the charges, the church will pay $1 million in fines, while Ensign Peak will pay $4 million.
The church's investment portfolio had grown to $32 billion by 2018. But its leadership said revealing that financial growth "would lead to negative consequences." It then created the various shell companies to conceal the true worth and composition of its investments.
"To address this issue, on March 21, 2005, the senior leadership of the Church approved a new reporting entity to be created with 'better care being taken to ensure that neither the 'Street' nor the media [could] connect the new entity to Ensign Peak," according to the order.
Ensign Peak maintained total discretion over all securities controlled, on paper, by the shell companies.
"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, Director of the SEC's Division of Enforcement, said in a statement issued Tuesday.
"The requirement to file timely and accurate information on Forms 13F applies to all institutional investment managers, including non-profit and charitable organizations."