Mormon church, investment unit fined $5M

SALT LAKE CITY — The Church of Jesus Christ of Latter-day Saints and its investment arm have been fined $5 million for using shell companies for more than two decades to obscure the size of the portfolio under church control, the U.S. Securities and Exchange Commission announced Tuesday.

The religious institution, widely known as the Mormon church, maintains billions of dollars of investments in stocks, bonds, real estate and agriculture. Much of its portfolio is controlled by Ensign Peak Advisers, a nonprofit investment manager overseen by ecclesiastical leaders known as its presiding bishopric.

The church has agreed to pay $1 million and Ensign Peak will pay $4 million in penalties based on the violation.

Federal investigators said that Ensign Peak, with the church’s knowledge, filed the forms through 13 shell companies they created, even as they maintained decision-making power. They also had “business managers,” mostly employed by the church, sign the shell company filings.

“The Church was concerned that disclosure of its portfolio, which by 2018 grew to approximately $32 billion, would lead to negative consequences,” the agency said in a statement announcing the charges.

Since a whistleblower alleged in 2019 the church had stockpiled nearly $100 billion in funds, rather than directing it toward charitable causes, Ensign Peak has been a source of intrigue and mystery for the nearly 17-million member Utah-based faith.

Ensign Peak is registered as a supporting organization and integrated auxiliary of the church.

In a statement, church officials said that over the time period investigated, none of their holdings had gone unreported and all had been disclosed through the separate companies. They said they had “relied upon legal counsel regarding how to comply with its reporting obligations while attempting to maintain the privacy of the portfolio” and noted that Ensign Peak had changed its reporting approach after learning of the SEC’s concerns in 2019.