Mormon Church to pay $5M fine for hiding $32B investment portfolio
The Mormon Church will pay a $5 million fine for hiding its $32 billion investment portfolio.
Church leaders “went to great lengths to avoid disclosing the church’s investments, depriving the [Securities and Exchange Commission] and the investing public of accurate market information,” SEC enforcement leader Gurbir Grewal said Tuesday in a statement.
The church and its investment arm, Ensign Peak Advisors, created 13 different shell companies between 1997 and 2019 to hide the massive fortune, according to federal investigators. The scheme meant Ensign Peak illegally filed false paperwork with the feds.
The SEC said the church attempted to hide the money to avoid public “negative consequences.” The Mormon Church asks all its members to donate 10% of their yearly income in a practice known as tithing.
In 2019, David Nielsen, a former Ensign Peak manager-turned-whistleblower, claimed the church was hiding $100 billion.
“Having seen tens of billions in contributions and scores more in investment returns come in, and having seen nothing except two unlawful distributions to for-profit concerns go out, he was dejected beyond words, and so was I,” Nielsen’s brother told the Washington Post at the time.
Nielsen’s complaint led to the SEC investigation. The feds said the church founded Ensign Peak in 1997 and steadily built the nest egg and shell company scheme from there.
The church said it relied on “legal counsel” when creating the plan and that it regretted the “mistakes made.”
A law professor who spoke with the Post questioned that rationale.
“What the law requires is so clear that I am genuinely surprised that anyone would do this,” University of Texas professor Henry T. C. Hu told the paper.
The church will pay the fine using investment returns, according to its statement.
“We have worked with the SEC for years to come to this settlement,” the church said. “We reached resolution and chose not to prolong the matter.”