Church comments on SEC settlement

[Dr Exiled]

They lied to prevent a dip in tithing revenues. Full stop. I'd love to see if they were correct to deliberately obfuscate their finances, though. Would church members contribute less to a $multibillion concern? However, the secretive church won't disclose it if it happens. Too bad. Bad news like that has a tendency to snowball into something the one and only can't admit and so it won't happen.

[Moksha]

A glorified paperwork issue has caused much ado about nothing. Amusing that the failing SLTrib is giddy with excitement but the story is rapidly losing steam. Critics rejoice at the Church getting any bad PR (even if said PR is inaccurate) and also fury at the SEC for such a small fine. In the eyes of our progressive secular critics they demand the Church must pay tithes to their god of government.

No one is expecting honesty or contriteness out of apologetics. The best that can be hoped for is not hearing the claim that the use of shell companies proves it is all true.

[Rivendale]

A glorified paperwork issue has caused much ado about nothing. Amusing that the failing SLTrib is giddy with excitement but the story is rapidly losing steam. Critics rejoice at the Church getting any bad PR (even if said PR is inaccurate) and also fury at the SEC for such a small fine. In the eyes of our progressive secular critics they demand the Church must pay tithes to their god of government.

No one is expecting honesty or contriteness out of apologetics. The best that can be hoped for is not hearing the claim that the use of shell companies proves it is all true.

And apparently shell companies are normal?

My gazillionaire tech entrepreneur acquaintance says that "shell companies" -- a pejorative term that has, so far as I know, not been used by the Church or by Ensign Peak Advisors -- are commonplace in huge financial transactions. I wouldn't know, but I've certainly heard a lot about what I take to be related or identical actions that were neither illegal nor unethical.

[canpakes]

And apparently shell companies are normal?

Exactly. Dan should ask himself why the Church felt that they needed to create more than a dozen in this situation, rather than stick his fingers in his ears and avert his eyes.

Even the least ‘sus’ reasons for setting one up carry some stink in the intent, here.

[Dr Moore]

LLCs are very common with large financial transactions. That is true.

Not all LLCs are shell companies.

A shell company is an LLC that serves no purpose other than to pass or shield money.

The church’s “clone LLCs” were shell companies.

They served no purpose than to shield money from public view. Their creation was solely and completely motivated by an intent to violate the letter and the spirit of securities disclosure law.

A 13F must be filed in the name of the parent LLC that controls the voting and the buy/sell decisions of shares owned. The church’s shell companies reported holdings in their own names, signed and attested by 13 “business managers” who had no voting control and performed no buy/sell decisions. The SEC order makes clear that these 13 individuals actually didn’t even have access to the documentation of trades. They were given a signature page every quarter and asked to sign.

That’s called breaking the law. It is NOT a glorified paperwork issue.

It isn’t a pejorative to call the church’s LLCs shell companies. That is exactly what they were. Even if the church refuses to admit that fact.

[Rivendale]

LLCs are very common with large financial transactions. That is true.

Not all LLCs are shell companies.

A shell company is an LLC that serves no purpose other than to pass or shield money.

The church’s “clone LLCs” were shell companies.

They served no purpose than to shield money from public view. Their creation was solely and completely motivated by an intent to violate the letter and the spirit of securities disclosure law.

A 13F must be filed in the name of the parent LLC that controls the voting and the buy/sell decisions of shares owned. The church’s shell companies reported holdings in their own names, signed and attested by 13 “business managers” who had no voting control and performed no buy/sell decisions. The SEC order makes clear that these 13 individuals actually didn’t even have access to the documentation of trades. They were given a signature page every quarter and asked to sign.

That’s called breaking the law. It is NOT a glorified paperwork issue.

It isn’t a pejorative to call the church’s LLCs shell companies. That is exactly what they were. Even if the church refuses to admit that fact.

Those 13 fake managers need to be held accountable as well.

[malkie]

And apparently shell companies are normal?

Exactly. Dan should ask himself why the Church felt that they needed to create more than a dozen in this situation, rather than stick his fingers in his ears and avert his eyes.

Even the least ‘sus’ reasons for setting one up carry some stink in the intent, here.

I think it was simply a matter of control.

As far as I can gather there is nothing at all illegal about setting up shell companies.

From my reading of the SEC press release and Order, I believe that the illegality arose from the fact that, in spite of their quarterly declarations for 20+ years, the shell companies were not independent investors - all of the investment decisions were made, centrally, by EPA. The SEC regs are designed specifically to prevent this kind of hidden accumulation of potential market influence.

In order to conceal the fact that EPA was pulling the strings, they had each shell company's "business manager" certify that they made the decisions. That was a lie, was illegal, and was done with the informed consent of the Prophet and his counselors, and the Presiding Bishopric.

This is why the church, and not just EPA, was fined.

Much of the rest was arguably unethical, but not strictly illegal.

ETA: I see Dr Moore has covered much the same ground while I was writing this. Perhaps my comment is redundant??

[Tom]

Several friends have called my attention to Public Square Magazine's tortured defense of the church's actions here. I expect that Mopologists will praise it as "very helpful," "calm," "lucid," "informed."

SeN wrote:

In the meantime, here are some calm statements on this little tempest:

“Church Issues Statement on SEC Settlement”

Deseret News: “Opinion: The role of finance in a religious institution: From any objective standpoint, The Church of Jesus Christ of Latter-day Saints is a most astonishing case study in economic sustainability”

Public Square Magazine: “Ensign Peak: Clarifying the SEC Announcement: Get facts on the SEC fine against Ensign Peak Advisors, the investment firm of The Church of Jesus Christ of Latter-day Saints, in this Q&A with securities attorneys.”

LOL. Prophets can see around corners.

[Dr Moore]

In order to conceal the fact that EPA was pulling the strings, they had each shell company's "business manager" certify that they made the decisions. That was a lie, was illegal, and was done with the informed consent of the Prophet and his counselors, and the Presiding Bishopric.

This is why the church, and not just EPA, was fined.

^^^ 100%.
That it was illegal and deliberate can never be apologetically dismissed.

[Kishkumen]

You people need to calm down! The highest leadership of the LDS Church just broke the law for years on end and were caught. Nothing to see here!