The Securities and Exchange Commission has fined the Church of Jesus Christ of Latter-Day Saints, known more colloquially as the Mormon church, for allegedly hiding how much money it has. The church agreed to pay a $1 million fine while its investment portfolio manager, Ensign Peak Advisors, agreed to pay $4 million.
The SEC said that with the LDS Church’s approval, Ensign Peak Advisors created 13 shell corporations to hide the church’s billions so those funds wouldn’t be tied back to the institution. The SEC claimed the church was concerned about the public finding out its investment portfolio had grown to $37.8 billion by 2020. That’s nearly the size of Harvard University’s endowment the same year.
In a 2020 report, the head of Ensign Peak, Roger Clarke, told the Wall Street Journal he believed church leaders were concerned knowledge of the large fund would discourage tithing.
According to the LDS Church’s official website, members must give 10% of their income to the church, where a council at headquarters then decides how to use the “sacred funds.”
“Tithing funds are always used for the Lord’s purposes–to build and maintain temples and meetinghouses, to sustain missionary work, to educate Church members, and to carry on the work of the Lord throughout the world,” the website reads.
“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,” said Gurbir Grewal, director of SEC’s enforcement division.
The LDS Church said in a statement that it relied upon legal counsel when signing off on the shell corporations.
“We affirm our commitment to comply with the law, regret mistakes made, and now consider this matter closed,” the church said Tuesday.
The LDS Church told its members the settlement fines will be paid using investment returns. It said the church invests in stocks, bonds, commercial and residential real estate, and agricultural properties.
