Church comments on SEC settlement

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Dr Moore
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Church comments on SEC settlement

Post by Dr Moore »

I think this deserves its own thread because the church's official response - issued within the same hour as the SEC released its judgment - deserves to be remembered and discussed in its own right. I consider this to be on par with the gospel topics essays in terms of importance to future generations looking back on church leadership: the gaslighting, misleading statements, obfuscation shenanigans and other silly tricks to prolong the illusion of being something they aren't.

https://newsroom.churchofjesuschrist.or ... settlement

This press release should be memorialized in granite. Particularly the Q&A section.

There are two very important things about this press release and the SEC settlement, in my mind:
  1. The church and its leaders (specifically, the first presidency & presiding bishopric) are named in the judgment and settlement. Meaning, blame can never be pushed or assigned to Ensign Peak management. The church itself must always wear the badge of having violated US securities law.
  2. The church statement does not claim "innocence" or that "we did nothing wrong" or anything to suggest that leaders believed they were acting in compliance with the law. That is HUGE. (And you'll notice, they tried to smuggle in a "we complied" statement by claiming to have complied during the SEC's process, complied with the law since 2020, and promise to comply from here onward -- it does NOT claim to have complied with the law prior to the SEC's action) There is a subtle amount of blame-shifting to outside counsel, for the advice on structuring the "Clone LLCs," but that is very subtle, basically implied. Critically, a press release like this will have been reviewed extensively by counsel, and carefully worded so as not to piss off the SEC or violate any terms of their settlement. It is 100% clear that the church cannot claim to have sought to obey, honor and sustain the law in this matter. It did not. It broke the law, was caught, and settled for the least-bad outcome (more below).
Some of the Q&A points are nigh unto "just shy of her 15th birthday" in terms of playing word games to avoid the obvious. Here are 3 of my favorites.
Q: Did Ensign Peak fail to comply with SEC regulations?

A: We reached resolution with the SEC. We affirm our commitment to comply with the law, regret mistakes made, and now consider this matter closed.
Translation: YES, Ensign Peak did not comply with SEC regulations. It broke the law. Once caught, we did as asked and have promised not to break the law again. We're sorry for getting caught and hope all believers will not be concerned, investigate what happened, or rehearse this with doubters.

Q: Why did this settlement take place now?
A: We have worked with the SEC for years to come to this settlement. We reached resolution and chose not to prolong the matter.
Translation: had we fought the SEC, we would have lost the enforcement action, carried an official "guilty" verdict and paid a much larger punitive fine.
Q: Where does the $5 million come from to satisfy the settlement?

A: The investment returns of the Church will be used to pay the settlement.
Translation: tithing, which you paid to Jesus but we didn't use because our Jesus wanted us to become a top-100 stakeholder in American capitalism, is used to pay this token fine.

Here is the full statement. It won't be lost from the web, but I can't help but wonder if the official Newsroom will at some point revise the statement (like it has done with the essays).
The Church released the following statement on Tuesday, February 21, 2023.

The Church of Jesus Christ of Latter-day Saints and its affiliated investment manager, Ensign Peak Advisors, Inc., have settled a matter with the Securities and Exchange Commission (SEC).

Investment managers who oversee a portfolio of public equities above a certain threshold are required to file Forms 13F with the SEC quarterly. These forms publicly disclose the names of the securities and their values.

Since 2000, Ensign Peak received and relied upon legal counsel regarding how to comply with its reporting obligations while attempting to maintain the privacy of the portfolio. As a result, Ensign Peak established separate companies (LLCs) that each filed Forms 13F instead of a single aggregated filing. Ensign Peak and the Church believe that all securities required to be reported were included in the filings by the separate companies.

In June 2019, the SEC first expressed concern about Ensign Peak’s reporting approach. Ensign Peak adjusted its approach and began filing a single aggregated report. Since that time, 13 quarterly reports have been filed in full accordance with SEC requirements.

This settlement relates to how the forms were filed previously. Ensign Peak and the Church have cooperated with the government over a period of time as we sought resolution.

We affirm our commitment to comply with the law, regret mistakes made, and now consider this matter closed.

FREQUENTLY ASKED QUESTIONS

Q: Who is Ensign Peak Advisors?

A: It is the affiliated investment manager for the Church.

Q: Who is the SEC?

A: The Securities and Exchange Commission regulates the United States securities markets. It has broad jurisdiction.

Q: What are Forms 13F?

A: Investment managers who oversee a portfolio of public equities above a certain threshold are required to file Forms 13F with the SEC quarterly. These forms publicly disclose the names of the securities and their values.

Q: Did the Church know about the practices at Ensign Peak described in the order?

A: The Church’s senior leadership received and relied upon legal counsel when it approved of the use of the external companies to make the filings. Ensign Peak handled the mechanics of the filing process. The Church’s senior leadership never prepared or filed the specific reports at issue.

Q: Has the reporting practice that prompted the SEC cease and desist order now stopped?

A: Yes. In June 2019, the SEC first expressed concern about Ensign Peak’s reporting approach. Ensign Peak adjusted its approach and began filing a single aggregated report. Since that time, 13 quarterly reports have been filed in full accordance with SEC requirements.

Q: Did Ensign Peak fail to comply with SEC regulations?

A: We reached resolution with the SEC. We affirm our commitment to comply with the law, regret mistakes made, and now consider this matter closed.

Q: When will the penalties be paid?

A: The penalties will be paid shortly to the U.S. Treasury.

Q: Where does the $5 million come from to satisfy the settlement?

A: The investment returns of the Church will be used to pay the settlement.

Q: How are the Church’s reserves invested?

A: Following the principle of preparing for the future, both near- and long-term, the Church maintains diversified reserves, including stocks, bonds, commercial and residential real estate, and agricultural properties. All funds are invested solely to support the Church’s mission.

Q: Why did this settlement take place now?

A: We have worked with the SEC for years to come to this settlement. We reached resolution and chose not to prolong the matter.

Q: Will this settlement impact Ensign Peak’s ability to continue to make investments?

A: No. With the announcement of the order, the matter is closed.
Last edited by Dr Moore on Wed Feb 22, 2023 2:46 am, edited 1 time in total.
MG 2.0
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Re: Church comments on SEC settlement

Post by MG 2.0 »

Dr Moore wrote:
Wed Feb 22, 2023 1:41 am
Here’s the Deseret News article that goes into some depth:

https://www.deseret.com/u-s-world/2023/ ... -reporting

Critics will make some hay over this. Church members will read the article and move on.

Regards,
MG
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Kishkumen
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Re: Church comments on SEC settlement

Post by Kishkumen »

I particularly like the last Q&A:

Will Jesus, Inc. continue to use tithing to play the market?

Yes, yes He will.
“If they can get you asking the wrong questions, they don’t have to worry about the answers.”~Thomas Pynchon, Gravity’s Rainbow
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Re: Church comments on SEC settlement

Post by Kishkumen »

MG 2.0 wrote:
Wed Feb 22, 2023 1:52 am
Critics will make some hay over this. Church members will read the article and move on.

Regards,
MG
No doubt, MG. Sad, but true. The worst corruption occurs out in the open and almost no one cares.
“If they can get you asking the wrong questions, they don’t have to worry about the answers.”~Thomas Pynchon, Gravity’s Rainbow
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Doctor CamNC4Me
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Re: Church comments on SEC settlement

Post by Doctor CamNC4Me »

MG 2.0 wrote:
Wed Feb 22, 2023 1:52 am
members will read the article and move on.
Yes. Yes you will. You’re a dupe.

- Doc
Hugh Nibley claimed he bumped into Adolf Hitler, Albert Einstein, Winston Churchill, Gertrude Stein, and the Grand Duke Vladimir Romanoff. Dishonesty is baked into Mormonism.
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Re: Church comments on SEC settlement

Post by Fence Sitter »

Once again we see the church and leadership do not hold themselves to the same standards they preach to members. Faithful members confess their sins and make restitution. The church pays a fine and considers the matter closed.
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Doctor Scratch
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Re: Church comments on SEC settlement

Post by Doctor Scratch »

Thanks very much for posting this, Dr. Moore—it’s absolutely devastating, and it confirms what many of us have long suspected: I.e., that the Church has a deep streak of greed running right through its core. How many faithful LDS have suffered, or died, or gone hungry while these Church-appointed financial managers were playing games with the books?
"If, while hoping that everybody else will be honest and so forth, I can personally prosper through unethical and immoral acts without being detected and without risk, why should I not?." --Daniel Peterson, 6/4/14
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Everybody Wang Chung
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Re: Church comments on SEC settlement

Post by Everybody Wang Chung »

And the proprietor of SeN wonders why Mormonism is one of the most disliked religions.
"I'm on paid sabbatical from BYU in exchange for my promise to use this time to finish two books."

Daniel C. Peterson, 2014
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Re: Church comments on SEC settlement

Post by Kishkumen »

Fence Sitter wrote:
Wed Feb 22, 2023 2:10 am
Once again we see the church and leadership do not hold themselves to the same standards they preach to members. Faithful members confess their sins and make restitution. The church pays a fine and considers the matter closed.
I figure that the Church acting like a corporation frees me to treat it as such. I take my businesses elsewhere.
“If they can get you asking the wrong questions, they don’t have to worry about the answers.”~Thomas Pynchon, Gravity’s Rainbow
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Dr Moore
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Re: Church comments on SEC settlement

Post by Dr Moore »

Dollars to donuts, the church paid more money in attorneys fees than the $5m settlement charges. Kirton McConkie is the real winner here.
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