Church comments on SEC settlement

[IHAQ]

https://www.patheos.com/blogs/danpeters ... qus_thread

Of course they did - they paid the fine which is an admission of culpability.

Technically (I gather - IANAL), they neither admitted nor denied culpability - these were terms of settlement.

OTOH, they did, in effect, say to the SEC: "You can make all of these allegations about us in public, and fine us, and we accept that we are never allowed to deny the allegations."

“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 S. Grewal, Director of the SEC’s Division of Enforcement. “The requirement to file timely and accurate information on Forms 13F applies to all institutional investment managers, including non-profit and charitable organizations.”

Ensign Peak agreed to settle the SEC’s allegation that it violated Section 13(f) of the Securities Exchange Act of 1934 and Rule 13f-1 thereunder by failing to file Forms 13F and for misstating information in these forms. The Church agreed to settle the SEC’s allegation that it caused Ensign Peak’s violations through its knowledge and approval of Ensign Peak’s use of the shell LLCs.

https://www.sec.gov/news/press-release/2023-35

Both Ensign Peak and the Church agreed to settle on those allegations. That's an admission of culpability, regardless of the wording within any settlement document. Do you have access to the settlement documents?

In a temple recommend interview when asked "Are you honest in your dealings with your fellow man?" would President Nelson accept a member answering "I neither confirm nor deny that I am honest in my dealings with my fellow man."? Of course not. Obfuscation is not the hallmark of an honest person.

[Fence Sitter]

DanielPeterson
11 hours ago
Please note, though, that neither the Church nor Ensign Peak Advisors conceded any of the SEC's charges.

https://www.patheos.com/blogs/danpeters ... qus_thread

Dr Peterson says this as if it is some sort of defense of the church and its leadership when, in fact, it is the most problematic part of the entire issue.

How many times do we see that the worst part of a crime ends up being the coverup?

Yes, this is a relatively minor issue as far as the SEC is concerned. The larger issue is the fact that the church is still trying to avoid responsibility for what happened while continuing to demand members trust them.


Can't have it both ways.

[Kishkumen]

I love being able to hold the LDS Church responsible by refusing to cooperate with it.

I love a big SMH to the LDS Church.

[malkie]

Technically (I gather - IANAL), they neither admitted nor denied culpability - these were terms of settlement.

OTOH, they did, in effect, say to the SEC: "You can make all of these allegations about us in public, and fine us, and we accept that we are never allowed to deny the allegations."

“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 S. Grewal, Director of the SEC’s Division of Enforcement. “The requirement to file timely and accurate information on Forms 13F applies to all institutional investment managers, including non-profit and charitable organizations.”

Ensign Peak agreed to settle the SEC’s allegation that it violated Section 13(f) of the Securities Exchange Act of 1934 and Rule 13f-1 thereunder by failing to file Forms 13F and for misstating information in these forms. The Church agreed to settle the SEC’s allegation that it caused Ensign Peak’s violations through its knowledge and approval of Ensign Peak’s use of the shell LLCs.

https://www.sec.gov/news/press-release/2023-35

Both Ensign Peak and the Church agreed to settle on those allegations. That's an admission of culpability, regardless of the wording within any settlement document. Do you have access to the settlement documents?

In a temple recommend interview when asked "Are you honest in your dealings with your fellow man?" would President Nelson accept a member answering "I neither confirm nor deny that I am honest in my dealings with my fellow man."? Of course not. Obfuscation is not the hallmark of an honest person.

You may well be right, IHAQ.

My understanding is that the SEC settlement statements (Press Release & Order) are the equivalent of the SEC accepting a plea of "no contest" from the church - somewhat different from "guilty".

Other than that I agree with your interpretation, especially with respect to the standard of honesty that the church claims to uphold.

[IHAQ]

You may well be right, IHAQ.

My understanding is that the SEC settlement statements (Press Release & Order) are the equivalent of the SEC accepting a plea of "no contest" from the church - somewhat different from "guilty".

Other than that I agree with your interpretation, especially with respect to the standard of honesty that the church claims to uphold.

It's what the Church doesn't say that speaks the most to me. They haven't said they're innocent of wrongdoing and will fight down to their last dime to prove it (which is what Christ would do). And they haven't, after being found to have knowingly not done the right thing and to have coerced some minions into perjuring themselves, said sorry to the members - which is another thing Christ would do.

Church Leaders want to exist in the grey, murky, ambiguous opaqueness of plausible deniability. They do not want the members; clearly understanding how they spend their time, knowing how much money the church has and what it does with it, and knowing what they mean when they say "revelation".

Whenever daylight enters the room, those Apostles scurry for the shadows like guilty cockroaches. Anything good to announce bears the name of the First Presidency. Anything bad and it's a spokesperson. You will note that the statement from The First Presidency about the SEC fine is anonymous - it's simply a "Church Statement". That's a clear insight about what kind of people run the Church.

[malkie]

You may well be right, IHAQ.

My understanding is that the SEC settlement statements (Press Release & Order) are the equivalent of the SEC accepting a plea of "no contest" from the church - somewhat different from "guilty".

Other than that I agree with your interpretation, especially with respect to the standard of honesty that the church claims to uphold.

It's what the Church doesn't say that speaks the most to me. They haven't said they're innocent of wrongdoing and will fight down to their last dime to prove it (which is what Christ would do). And they haven't, after being found to have knowingly not done the right thing and to have coerced some minions into perjuring themselves, said sorry to the members - which is another thing Christ would do.

Church Leaders want to exist in the grey, murky, ambiguous opaqueness of plausible deniability. They do not want the members; clearly understanding how they spend their time, knowing how much money the church has and what it does with it, and knowing what they mean when they say "revelation".

Whenever daylight enters the room, those Apostles scurry for the shadows like guilty cockroaches. Anything good to announce bears the name of the First Presidency. Anything bad and it's a spokesperson. You will note that the statement from The First Presidency about the SEC fine is anonymous - it's simply a "Church Statement". That's a clear insight about what kind of people run the Church.

Absolutely - they have surely enough money to fight the allegations if they believed they would prevail. I suspect that the decision was made (see what I did there? ) to avoid the likelihood that they would be found guilty.

And now, because they accepted the settlement, they cannot ever claim that they were innocent of the allegations.

[Dr Moore]

People across the web fail to realize that the first presidency signed off on the language in the settlement order.

They agreed to it and agreed not to contest it.

Deliberate violation of the law. Paid and signed to avoid an even worse outcome with open and shut litigation, bigger fines and an official guilty verdict.

Black and white.

[drumdude]

People across the web fail to realize that the first presidency signed off on the language in the settlement order.

They agreed to it and agreed not to contest it.

Deliberate violation of the law. Paid and signed to avoid an even worse outcome with open and shut litigation, bigger fines and an official guilty verdict.

Black and white.

Chris365: "And at least according to the SEC, and a settlement the church signed off on and agreed to, the reason for the multiple companies being created was to avoid the reporting threshold."

Please note, though, that neither the Church nor Ensign Peak Advisors conceded any of the SEC's charges.

DCP is framing it the same way companies deal with patent trolls. The company is in the right but they pay the patent troll to move on.

[Dr Moore]

DCP is wrong.

There are two obvious problems with DCP's response:

1) The reporting threshold is $100 million in public equity assets. To hide $32 billion in stocks, the church would have needed at least 320 clone LLCs. It had only 13. Its clone LLCs held billions in stocks apiece. None of them were below the reporting threshold. The only way a person could honestly claim that "the reason for multiple companies being created was to avoid the reporting threshold" is if that person does not understand the reporting law. Whether by willful ignorance or just plain ignorance.

2) Creating multiple LLCs to avoid the reporting threshold ($100M) is still illegal and a violation of the law. The law isn't just a function of how much an entity owns, but most importantly is about who ultimately controls the buy/sell decisions and who controls the voting block of shares. Even if it made 1000 clone LLCs and each one was materially below the $100M threshold, that still would not have had any effect on the SEC's enforcement, the illegality. If anything, it would make things worse by demonstrating an even more flagrant violation of the law (assuming the entities refused to report 13F's at all, based on owning less than the reporting threshold)

It's cute that Dan is trying, but he really should go back to silence if this is his best effort.

A signal that Dan is taking bad counsel from uninformed people is in his blog entry:

One of the other participants in the meeting is a highly successful, remarkably bright, and very wealthy tech entrepreneur, a still relatively young Latter-day Saint who has launched at least three substantial companies and sold two of them for enormous sums. He dismissed this issue as “a nothing burger,” and said that the hysteria about it in some circles makes him despair at human stupidity. And maybe that’s the right reaction.

Successful startup entrepreneurs are worth listening to about a lot of things. Securities law is not one of them. This guy, whoever he is, doesn't know what he's talking about. This is not a "nothing burger" in terms of what it says about the integrity of the first presidency in general, much less when it comes to the 12th article of faith. The church's press release responding to the SEC might be even less of a "nothing burger" than the original offence, in terms of being a violation of members' trust. Dan, read Sam Brunson's messages again, carefully. Read what he wrote before, and after, the details of this settlement came out.

[malkie]

DCP is wrong.

There are two obvious problems with DCP's response:

1) The reporting threshold is $100 million in public equity assets. To hide $32 billion in stocks, the church would have needed at least 320 clone LLCs. It had only 13. Its clone LLCs held billions in stocks apiece. None of them were below the reporting threshold. The only way a person could honestly claim that "the reason for multiple companies being created was to avoid the reporting threshold" is if that person does not understand the reporting law. Whether by willful ignorance or just plain ignorance.

2) Creating multiple LLCs to avoid the reporting threshold ($100M) is still illegal and a violation of the law. The law isn't just a function of how much an entity owns, but most importantly is about who ultimately controls the buy/sell decisions and who controls the voting block of shares. Even if it made 1000 clone LLCs and each one was materially below the $100M threshold, that still would not have had any effect on the SEC's enforcement, the illegality. If anything, it would make things worse by demonstrating an even more flagrant violation of the law (assuming the entities refused to report 13F's at all, based on owning less than the reporting threshold)

It's cute that Dan is trying, but he really should go back to silence if this is his best effort.

A signal that Dan is taking bad counsel from uninformed people is in his blog entry:

One of the other participants in the meeting is a highly successful, remarkably bright, and very wealthy tech entrepreneur, a still relatively young Latter-day Saint who has launched at least three substantial companies and sold two of them for enormous sums. He dismissed this issue as “a nothing burger,” and said that the hysteria about it in some circles makes him despair at human stupidity. And maybe that’s the right reaction.

Successful startup entrepreneurs are worth listening to about a lot of things. Securities law is not one of them. This guy, whoever he is, doesn't know what he's talking about. This is not a "nothing burger" in terms of what it says about the integrity of the first presidency in general, much less when it comes to the 12th article of faith. The church's press release responding to the SEC might be even less of a "nothing burger" than the original offence, in terms of being a violation of members' trust. Dan, read Sam Brunson's messages again, carefully. Read what he wrote before, and after, the details of this settlement came out.

I regarded the potential creation of sub-threshold LLCs, all controlled by EPA, as akin to structuring in the world of money laundering. It's an offence in and of itself, regardless of anything else.