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

The faith, 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.

Ensign Peak avoided disclosing investments "with the church's knowledge," denying the SEC and the public of accurate information required under law, Gurbir Grewal, the agency's enforcement director, said in a statement.

Federal investigators said for a period of 22 years, the firm violated agency rules and the Securities Exchange Act by not filing paperwork required that disclosed the value of its assets.

Instead, they said Ensign Peak filed the forms through 13 shell companies they created, even as they maintained decision-making power. They also had "business managers," most employed by the church, sign the required 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 SEC said in a statement announcing the charges.

Increasingly, the church and its Salt Lake City-based investment arm have faced scrutiny over the fact that tax law largely exempts religious groups from paying U.S. taxes. Ensign Peak is registered as a supporting organization and integrated auxiliary of the church. Investment managers of its size are required to report stockholdings quarterly.

It gained traction in 2019 when a whistleblower alleged the church had stockpiled nearly $100 billion in funds, rather than directing it toward charitable causes. Ensign Peak has since been a source of intrigue and mystery for the nearly 17-million member Utah-based faith, which encourages members worldwide to give 10% of their income in a what is known as "tithing."

Two years later, prominent church member James Huntsman filed a lawsuit against the church alleging it misrepresented how it used donations and, rather than direct them to charitable causes, invested in assets including real estate and an insurance business. A judge dismissed the complaint last year and Huntsman later appealed the decision.

Earlier this month, the 2019 whistleblower, a former Ensign Peak investment manager named David Nielsen, submitted a 90-page memorandum to the U.S. Senate Finance Committee demanding oversight into the church's finances.

In a statement, church officials said 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.

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

Sam Brunson, a church member and tax law professor at Loyola University Chicago, said the $5 million fine differed from past accusations leveled against Ensign Peak because the church appears to have admitted some fault.

A failure to fill out SEC paperwork may not fuel broader conversations about how the church manages its money, he said, yet it reflects an "incredibly aggressive" strategy to keep certain information from the public.

"For the last 70 years or so, the Mormon Church has had an ethos of keeping its finances private," Brunson said.

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Mormon church fined for obscuring $32 billion investment portfolio

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The U.S. Securities and Exchange Commission says The Church of Jesus Christ of Latter-day Saints and its investment arm will pay $5 million in fines.

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The Church of Jesus Christ of Latter-day Saints and the company that manages its stock investments have agreed to pay a combined $5 million offer of settlement for past financial reporting practices in an order released Tuesday by the U.S. Securities and Exchange Commission.

The church and its affiliate, Ensign Peak Advisors, Inc., adjusted their practices in 2019 after learning about SEC concerns and complied with rules that require them to disclose the church's entire stock portfolio in a single set of quarterly filing forms, the SEC said. They are considered to be in complete compliance.

"This settlement relates to how the forms were filed previously," the church statement said. "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."

The church fully cooperated with SEC officials in active discussions with the commission and offered the settlement. SEC commissioners announced Tuesday it had settled charges by accepting the church's offer and ordered the church and Ensign Peak Advisors Inc. to "cease and desist" the previous reporting practices they already had abandoned. The church and Ensign Peak have followed the correct filing procedure for 13 quarters now.

Ensign Peak will pay a $4 million penalty to the U.S. Treasury within 10 days. The church will pay $1 million.

Violations of 13F disclosure requirements are a negligible portion of the SEC's annual enforcement efforts. The SEC filed 760 enforcement actions in fiscal year 2022 and levied nearly $4.2 billion in civil penalties, according to an SEC press release.

The SEC order alleged that Ensign Peak violated section 13(f) of the Exchange Act by failing to file Forms 13F in Ensign Peak's name. The church agreed to settle the SEC's allegation that it caused Ensign Peak's violations by approving its filing practice.

The SEC order said that in agreeing to a settlement, the church admitted no wrongdoing.

"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, in a news release. "The requirement to file timely and accurate information on Forms 13F applies to all institutional investment managers, including non-profit and charitable organizations."

The order contained allegations not addressed by the church, but the settlement brings the investigation to an end.

"From 1997 through 2019 (the church and Ensign Peak) ... failed to file with the Commission certain required forms that would have disclosed the size of the church's equity portfolio," the SEC order said.

The church said it wanted to maintain the privacy of its holdings. Some church officials said previously that they wanted to avoid church members following church investments as a roadmap for personal investing because they might not be appropriate to their circumstances.

A church statement said leaders had followed legal advice in its filings.

"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," the church said in a statement released Tuesday.

Beginning with the fourth quarter report for 2019, the church now has filed 13 quarterly reports "in full accordance with SEC requirements," the church statement said.

Ensign Peak filed its latest Forms 13F disclosure on Monday, reporting that the church held nearly $44.4 billion in U.S. securities at the end of the fourth quarter of 2022.

The church earmarks an annual portion of its budget each year for reserves that are invested through its affiliated securities investment manager, Ensign Peak, or through the church's agriculture and real estate affiliates, the church's Presiding Bishopric told the Deseret News in 2020.

"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," the church said in a Frequently Asked Questions statement released Tuesday. "All funds are invested solely to support the church's mission."

Ensign Peak's quarterly filings since 2019 show the volatility of the U.S. stock market over that time. The church's stock holdings with Ensign Peak have ranged in value over the past three years from a low of $29.8 billion at the end of the first quarter of 2020 to a high of $52.3 billion at the end of 2021, according to 13f.info.

The church created Ensign Peak in 1997 as an integrated auxiliary to manage the reserves it has invested in securities, or stocks. For example, the church holds 15.6 million shares of Apple stock through Ensign Peak.

The SEC order said it investigated Ensign Peak's activity from 1997 through 2019.

Church and Ensign Peak leaders received legal counsel, the church statement said, that they could create a trust to own a separate limited liability company to file Forms 13F. That trust was formed in April 2001 and a single LLC filed its first disclosure, or Form 13F, in February 2003, the SEC said.

The SEC said that the LLC could do so only if Ensign Peak transferred operational investment discretion to the LLC, but the SEC alleged that it did not.
The church's entire statement said: The church also published this FAQ about the settlement:

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Church settles case with SEC over financial reporting

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Ensign Peak Advisors, Church of Jesus Christ agree to pay penalty to settle investigation

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Investigate the LDS Church for tax fraud, IRS whistleblower urges U.S. Senate

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A whistleblower, David Nielsen, has sent further allegations of fraud by the LDS Church’s investment arm, Ensign Peak Advisors, to the U.S. Senate Finance Committe, urging the committee to investigate.

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"These funds are utilised in accordance with relevant laws and regulations," the spokesman said.

Former Mormon bishop Dr Simon Southerton, who made the initial complaint about the church's tax practices to the charities' regulator, said the shift in Australia was important. It comes several months after the US Securities and Exchange Commission settled a case against the Mormon-run Ensign Peak Advisors and the church for $5 million after it failed, over a 22-year period, to disclose its investments and hid its assets via a network of shell companies.

"One has to hope that this signals the beginning of Australian regulatory authorities taking action in respect of the $400 million rort the church has been engaged in at the expense of the Australian taxpayer," Southerton said.

In 2019, the Australian Taxation Office made a binding ruling that for a charity to have deductible gift recipient status - which allows tax write-offs for donors - it must have Australia as "the focal point ... in a legal or organisational sense".

Yet LDS Charities Australia has no paid staff and financial reports for the Utah-based Latter-Day Saint Charities - obtained by this masthead last October - confirm it is the legal entity that employs and pays staff for the church's global charitable operation, including in Australia.

A church spokesman has previously said the Utah-based charity "identified and referred" charitable projects to LDS Charities Australia but maintained local volunteers made the decisions on which projects were funded.

Until 2020, filings with the charities' regulator stated that LDS Charities Australia had just four local volunteers to run what purported to be one of the biggest charities in the country. In 2022, it claimed it had 15 volunteers.

The tax structure in Australia has meant that since 2015, adherents have been able to draw on $450 million in tax deductions not available to followers of other religions or denominations.

The church has previously reported that it spends up to 70 per cent of its Australian income on charity. Globally, the church spends as little as 0.3 per cent of its revenue on charity.

The Australian Taxation Office said it could not comment on the tax affairs "of any individual or entity due to our obligations of confidentiality and privacy under the law".

In Senate estimates last November, Tax Office Assistant Commissioner Jeremy Hirschhorn said, in response to a question from Greens senator David Shoebridge, that the ATO was "very aware of those allegations" against the Mormon Church.

ATO Assistant Commissioner Jeremy Hirschhorn. Credit: Michael Quelch

"Due to taxpayer secrecy, I cannot confirm or deny whether an investigation is taking place," he said. "I'll also say as a general proposition, not talking about the specific taxpayer, that we do not view tithing as a gift, because a gift must be unconditional. Tithing, therefore, is not eligible for deductibility."

The exposure of the church's tax practices in Australia led to a broader joint investigation involving 60 Minutes and the Canadian Broadcasting Corporation that uncovered tax minimisation by the Mormon Church in other countries including Canada and the United States.

This masthead also revealed last October that the international Mormon Church had dramatically overstated its global charitable giving by more than $US1 billion between 2008 and 2020 to make itself appear far more generous than it is.

The extent of Mormons' charity overstatement was uncovered in 15 years of previously unreleased financial reports.

The church's Salt Lake Temple in Utah. Credit: iStock

A Washington Post investigation in 2020 revealed the church was secretly running a $US100 billion investment fund, Ensign Peak, that was accumulating vast tax-free wealth by investing in hedge funds, Chevron, Visa, Apple and some of the biggest landholdings in the US.
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Mormons walk away from major multinational tax evasion scheme

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The Mormon Church is significantly reducing its use of a controversial shell company after an investigation revealed it had engaged in alleged serious tax evasion in Australia.

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The spire of the Mormon Temple of the Church of Jesus Christ of Latter-day Saints is seen in Salt Lake City. (George Frey/Bloomberg News)

Federal regulators on Tuesday announced charges against the Church of Jesus Christ of Latter-day Saints and its nonprofit investment arm, alleging they took measures to conceal the size of the church's considerable investments, including creating shell companies with phony office addresses.
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The church and Ensign Peak Advisors will collectively pay $5 million to resolve the allegations, according to the Securities and Exchange Commission. The agency said the church's equity investments were valued at about $32 billion in 2018, though a former church investment manager alleged in a 2019 complaint to the IRS that the church had amassed $100 billion in total holdings, including stocks, bonds and cash.

Mormon Church has misled members on $100 billion tax-exempt investment fund, whistleblower alleges

Ensign Peak, which is operated by the Church of Jesus Christ of Latter-day Saints - commonly known as the Mormon Church - allegedly failed to disclose the size of its total equity holdings, as the SEC requires of all large U.S. investment firms. Instead, the agency said, Ensign Peak created 13 shell companies with approval from the church and divided its investment disclosure forms among them. The shell companies were controlled by Ensign and the forms were signed by managers who mostly worked for the church.

"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," Gurbir S. Grewal, the SEC's enforcement director, said in a statement.

Despite documenting over 20 years of efforts to conceal information, the SEC stopped short of describing the church's activities as fraud, and decided to impose a relatively small civil penalty relative to the size of the church's resources, said Jacob S. Frenkel, a former senior counsel in the SEC's division of enforcement.

"They are showing institutional respect for the church," Frenkel said. "If this had been a private institution, the monetary penalty would have much larger."

The church confirmed the settlement in its own statement Tuesday, saying that it regrets "mistakes made" and that it was acting on legal advice on how to "comply with its reporting obligations while attempting to maintain the privacy of the portfolio." Ensign Peak revised its reporting process after it heard from the SEC in 2019 and, since then, has disclosed its investments in a single, quarterly report, the statement said.

The settlement follows the efforts by a whistleblower, former Ensign Peak investment manager David A. Nielsen, to hold the church accountable for how it uses its member donations. In an explosive whistleblower complaint with the IRS, he alleged that the church's stockpiling of $100 billion in funds, rather than using them for charitable purposes, could be a violation of tax rules. Mormons are asked to give 10 percent of their income to the church, and Nielsen claimed a large portion of these tithings are managed by Ensign Peak investors.

The allegations spurred criticism that the church hoarded money while demanding contributions from struggling families. Others have viewed the church's fortune as the result of prudent financial management - including Sen. Mitt Romney (R-Utah), who said he was pleased that his church had "not only saved for a rainy day, but for a rainy decade."

At the time, the church leadership said the complaint was "based on a narrow perspective and limited information."

After lodging the complaint with the IRS, Nielsen also filed a whistleblower complaint with the SEC, his lawyer, Michael Sullivan, said in an interview earlier this month. If Nielsen's information was critical to the SEC's enforcement action, he may stand to collect up to $1.5 million, or 30 percent of the civil penalties the agency collects. Sullivan confirmed Nielsen could receive an award from the SEC but did not say how much.

Securities experts said the type of disclosure in question, called 13F, is designed to give stock market participants transparency about who owns stocks.

Henry T. C. Hu, a corporate and securities law professor at the University of Texas law school, said the amount of information that needs to be disclosed on the forms is fairly minimal, consisting of a list of the securities owned and the types, along with a few other details. Trying to disguise assets by attributing them to multiple shell companies seems like an obvious violation of the rules, Hu said.

"What the law requires is so clear that I am genuinely surprised that anyone would do this," he said.

The SEC's nine-page order against the Church of Jesus Christ of Latter-day Saints contains a rare glimpse inside the church's notoriously secretive financial operations. According to the document, top Mormon officials were worried about the public discovering the connections between the church, Ensign Peak and the shell companies it used to report its equity investments.

In 2015, when senior church leaders feared someone was connecting these dots, they advised managers to "gradually and carefully adapt Ensign Peak's corporate structure to strengthen the portfolio's confidentiality," the SEC said, quoting internal church documents from its investigation.

Ensign Peak's 13 shell entities were registered to addresses in different cities outside Utah to give the impression they were doing business across the country, the SEC said. However, the agency said no business was done at these places other than collecting mail. Phone numbers for each entity were all sent directly to voice mail; one manager was instructed to notify senior leaders of any voice mails from regulatory agencies, and delete all the others, the SEC order said.

The church's own internal auditors reviewed Ensign Peak in 2014, and again in 2017, according to the SEC. The auditors highlighted the risk that the SEC might disagree with the corporate filing structure, though it did not recommend any specific changes.
Michelle Boorstein contributed to this report.

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Mormon Church, investment arm to pay $5 million to resolve SEC case

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Regulators had accused the Church of Jesus Christ of Latter-day Saints and Ensign Peak Advisors of trying to obscure the size of the church's vast portfolio.

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A former investment manager for the Church of Jesus Christ of Latter-day Saints says that the organization stockpiled more than $100bn in funding intended for charity work but never spent it on such projects.

"It was really a clandestine hedge fund," David A Nielsen said during an interview with CBS's 60 Minutes. "Once the money went in, it didn't go out."

Nielsen, who submitted a complaint to the Internal Revenue Service in 2019, previously managed the church's investment arm, Ensign Peak Advisors, for nine years.

A report on the complaint to the top US tax authority was published by the Washington Post in 2019 after Nielsen's brother provided a copy.

Nielsen, a devout Mormon himself, was first recruited to work for Ensign Peak while working on Wall Street.

Nielsen said that during his time with Ensign Peak, he observed the church's investment firm "[masquerading] as a charity", dodging what would be billions of dollars in taxes by falsifying records, and generally misleading other believers of the Mormon faith.

Every year, the Church of Jesus Christ of Latter-day Saints collected an estimated $7bn from its 17 million members through a practice known as tithing, in which members give about 10% of their income to the religious organization.

About $1bn of the collected money was placed into a reserve fund at Ensign Peak - which is registered as a non-profit - and invested, with profits growing tax-free.

Created in 1997, the reserve fund has ballooned to more than $100bn, which is nearly twice the size of Harvard's endowment, Nielsen said.

"I thought we were going to change the world," Nielsen remarked. "We just grew the bank account."

Records show that money from the church's reserve fund was used to support for-profit initiatives, including a Salt Lake City mall built on church land and a church-owned insurance company.

Nielsen resigned in 2019 after a website named Mormon Leaks linked church members to shell companies that held billions of dollars in stocks and bonds, assets that were actually controlled by Ensign Peak.

After his resignation, Nielsen filed a 74-page whistleblower complaint to the IRS that accused Ensign Peak of violating its tax-exempt status by directing money to for-profit businesses.

Nielsen's complaint was later forwarded to the Securities and Exchange Commission, which said the church took great lengths to hide the size of its investments through shell companies and fake office addresses, the Washington Post reported.

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The church paid $5m to resolve its SEC case in February.

The Mormon church official W Christopher Waddell, who oversees the organization's financial, real estate, investment and charitable operations as the first counselor in the presiding bishopric, vehemently denied Nielsen's accusations.

"Flat-out wrong," said Waddell, who added that Ensign Peak acted as "the church's treasury" and provided resources for its operation.

Nielsen's interview with 60 Minutes is one of the first times he has given public comment on the report.

"We gave the IRS and the SEC all the professional courtesy," Nielsen said. "This is just too important to fall through the cracks."

But experts say that the likelihood of the IRS investigating Nielsen's claims is low.

"The political risk is so great that it comes with real danger," former IRS official Phil Hackney said during the 60 Minutes segment. "At the same time, there's a real risk to the rule of law if the IRS doesn't come in and enforce those rules."

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Mormon church has $100bn 'clandestine hedge fund', says whistleblower

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A former investment manager for the Church of Jesus Christ of Latter-day Saints says that the organization stockpiled more than $100bn in funding intended for charity work but never spent it on such projects. "It was really a clandestine hedge fund," David A Nielsen said during an interview with CBS's 60 Minutes.

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Whistleblower David Nielsen on 60 Minutes - 2019 IRS report, Mormon church fund, and more

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Whistleblower David Nielsen speaks about the Mormon church fund, Ensign Peak Advisors, IRS report in 2018, and more.

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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.

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The Church of Jesus Christ of Latter-day Saints released the following statement on Thursday, February 16, 2022.

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Today, the U.S. Securities and Exchange Commission (SEC) announces it is fining the Church Of Jesus Christ Of Latter-Day Saints and its investment arm, Ensign Peak Advisors, $1 million and $4 million, respectively, for a scheme to conceal the value of the church's assets. The SEC order shows that the LDS Church's investment firm, with the knowledge of its First Presidency, used shell companies to obscure the church's investment wealth. Based on the order, the motivation appears to be saving face, over fear that public knowledge of the church's wealth would lead to negative consequences in light of the size of the church's portfolio.

The LDS Church responded with a statement claiming these "mistakes" have been addressed and that they have been in compliance with federal disclosure laws since June 2019. This newfound compliance with the law came shortly after an IRS whistleblower complaint revealed the church's holdings are valued around $100 billion.

So, how did we get here? Here's a timeline outlining the events leading up to the SEC's investigation and eventual penalty for the LDS Church's illegal financial reporting practices.

1997

The Church Of Jesus Christ Of Latter-Day Saints creates Ensign Peak to manage the church's investment assets. At its inception, Ensign Peak initially managed approximately $7 billion of church assets, according to the SEC order, a significant percentage of which consisted of Section 13F Securities. The portion of 13F Securities in the portfolio grew to approximately $37.8 billion by 2020. 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 disclose the names of the securities and their values.

1998

Senior management at Ensign Peak are made aware of Ensign Peak's requirement to file Forms 13F and communicate this requirement to senior leadership of the church, according to the SEC.

The SEC order states: "Throughout its history, at least once each year, Ensign Peak's Managing Director met with the senior leadership of the Church to discuss Ensign Peak's activities, including the LLC Structure. Unanimous approval from the senior leadership of the Church was required before Ensign could deviate from the LLC Structure and file Forms 13F in Ensign Peak's own name."

2000s

With approval from The First Presidency of the LDS Church, Ensign Peak establishes the first of its shell companies (LLCs) that each file Forms 13F instead of a single aggregated filing. The SEC order states this is because "The Church was concerned that disclosure of the assets in the name of Ensign Peak, a known Church affiliate, would lead to negative consequences in light of the size of the Church's portfolio."

Church leaders, including then-president Elder Gordon B. Hinckley, continue to tell members and the public that all of the church's assets are "money-consuming and not money-producing assets."

April 2003

After the church earmarks the money for the City Creek shopping center, President Hinckley tells members at the LDS General Conference, "We have felt it imperative to do something to revitalize this area. But I wish to give the entire Church the assurance that tithing funds have not and will not be used to acquire this property. Nor will they be used in developing it for commercial purposes."

March 2005

According to the SEC order, the LDS Church becomes aware that the public might link this first LLC to the church because the person signing the Forms 13F is listed in a public directory as a Church employee. To address this issue, the senior leadership of the Church approves a new shell company to be created with "better care being taken to ensure that neither the 'Street' nor the media [could] connect the new entity to Ensign Peak."

May 2011

The church's senior leadership approves Ensign Peak's recommendation to "clone" the second LLC to create new Form 13F filers, after Ensign Peak expresses concern that its portfolio was so large that the filings under the name of the second shell company might attract unwanted attention. The order outlines that the church's investment firm creates five new entities under which to make 13F filings.

2014

The Church Audit Department (CAD) conducts the first of two internal audits of Ensign Peak (the second audit in 2017). In discussions with senior management, CAD highlights the risk that the SEC might disagree with the approach of the LLC Structure.

November 2015

Ensign Peak forms six additional clone LLCs, bringing the total to 12 shell companies, after Ensign Peak became aware that a third party appeared to have connected the holdings of various LLCs back to Ensign Peak. The order states that the senior leadership of the Church approves a plan to "gradually and carefully adapt Ensign Peak's corporate structure to strengthen the portfolio's confidentiality."

May 2018

The Truth and Transparency website links various entities to the Church, their filings revealing holdings of approximately $32 billion. Following the report, two Ensign Peak business managers resign, voicing concerns about what they had been asked to do.

The Church Of Jesus Christ Of Latter-Day Saints issues a press release, Church Finances and a Growing Global Faith, claiming that the Church uses it resources for religious and charitable causes and those resources come principally from the tithing donations of Church members with a small portion of funds from businesses maintained by the Church. It goes on to say that the church sets aside money for its reserves, which include "stocks and bonds, taxable businesses, agricultural interests and commercial and residential property," and those reserves are overseen by Church leaders and managed by professional advisers.

November 2019

David A. Nielsen, a former money manager at Ensign Peak, the investment management branch of the Church Of Jesus Christ Of Latter-Day Saints, files a whistleblower complaint with the IRS. First reported by The Washington Post, Nielsen claims that Ensign Peak had a $100 billion reserve portfolio from stockpiling charitable donations rather than using them for charitable purposes-possibly breaching federal tax rules. The whistleblower complaint accuses LDS church leaders of misleading members about how their donations are spent. (Members are encouraged to donate 10% of their earnings as tithings to the church to remain in good standing and participate in religious ceremonies and services in its temples.) The complaint also accuses the church of using the tax-exempt donations for business ventures like the City Creek shopping center.

December 2019

After the whistleblower complaint makes headlines, The First Presidency of the LDS Church responds to the with a statement:

"We take seriously the responsibility to care for the tithes and donations received from members. The vast majority of these funds are used immediately to meet the needs of the growing Church including more meetinghouses, temples, education, humanitarian work and missionary efforts throughout the world. Over many years, a portion is methodically safeguarded through wise financial management and the building of a prudent reserve for the future. This is a sound doctrinal and financial principle taught by the Savior in the Parable of the Talents and lived by the Church and its members. All Church funds exist for no other reason than to support the Church's divinely appointed mission.

Claims being currently circulated are based on a narrow perspective and limited information. The Church complies with all applicable law governing our donations, investments, taxes, and reserves. We continue to welcome the opportunity to work with officials to address questions they may have."

February 2020

Roger Clarke, the head of Ensign Peak, tells The Wall Street Journal that LDS leaders wanted to keep the church's $100 billion reserve a secret because they were afraid, upon seeing the church's amassed wealth, some members might stop paying tithing. "[Paying tithing] is more of a sense of commitment than it is the church needing the money," said Clarke "So they never wanted to be in a position where people felt like, you know, they shouldn't make a contribution."

March 2020

For the first time, Ensign Peak publicly discloses the earnings and investments of the LDS Church's largest stock portfolio, filing a consolidated Form 13F for the quarter ended in December 31, 2019, rather than under the names of separate LLCs. The 13F Securities are valued at approximately $37.8 billion.

November 2022

Canadian Broadcasting Corporation's " The Fifth Estate " reveals, since 2007, the LDS church has raised in Canada more than $1 billion (CAD) and sent it from the Canadian church to BYU. That's about 70% of the tithing money collected from Canadian members.

January 2023

Whistleblower David A. Nielsen calls on the Senate to investigate the LDS Church and Ensign Peak Advisors for tax fraud. He files a 90-page memorandum with the Senate Finance Committee, obtained by Religion Unplugged, which shows "evidence of false statements, systematic accounting fraud" and violations of tax laws. It goes on to say, "For at least 22 years, [Ensign Peak] and certain senior executives have perpetrated an unlawful scheme that relies on willfully and materially false statements to the IRS and the SEC, so this for-profit, securities investment business that unfairly competes with large hedge funds can masquerade as a tax-exempt, charitable organization."

February 2023

The Wall Street Journal reports that the SEC is investigating Ensign Peak for allegedly concealing its multibillion-dollar portfolio for years.

Two weeks later, the SEC files an order and sends out a press release, announcing charges against the Church for these violations. To settle the charges, Ensign Peak agrees to pay a $4 million penalty and the LDS Church agrees to pay a $1 million penalty.

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

The church issues a statement in response to the settlement with the SEC, saying in part:

"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."

See more stories like this and all of our culture and community coverage. And while you're here, why not subscribe and get six annual issues of Salt Lak e magazine's curated guide to the best of life in Utah.

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SEC Fines LDS Church For Hiding $32 Billion In Assets: Timeline

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SEC fines the Church Of Jesus Christ Of Latter-Day Saints and its investment arm, Ensign Peak Advisors, for $5 billion.

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Topline

The federal Securities and Exchange Commission charged the Church of Jesus Christ of Latter Day Saints on Tuesday for violating federal tax laws, after a whistleblower revealed the church had allegedly deceived donors into raising money for a massive fund that has never been touched.

The Church of Jesus Christ of Latter Day Saints agreed to $5 million in fines following an SEC ... [+]
AFP via Getty Images

Key Facts

Following an investigation into the church's investment practices sparked by the whistleblower, David Nielsen-a member of the church and former Ensign Peak investment manager - the church agreed to pay $1 million.

A non-profit group under the church's umbrella in charge of managing its investments, Ensign Peak, agreed to pay $4 million, the SEC announced in a statement on Thursday.

According to the SEC, Ensign Peak failed to disclose the church's equity investments between 1997 and 2019 and instead filed forms with "shell" companies as opposed to filing them in the company's name, in a measure that "obscured the church's portfolio."

By 2018, that investment fund had grown to roughly $32 billion, with the organization allegedly going to "great lengths to avoid disclosing the church's investments" and keeping the public and the SEC in the dark about how much money it had accumulated, with Nielsen suggesting it was intended to be used for the Biblical second coming of Jesus Christ, the Washington Post reported.

The Church of Jesus Christ of Latter Day Saints did not respond immediately to a Forbes inquiry.

Key Background

Nielsen filed a complaint with the IRS against the church in November 2019, alleging the church had not spent a penny of the fund in more than 20 years, and claiming it had amassed $100 billion in charitable contributions from members of the church. In the complaint, Nielsen also argued Ensign Peak should be stripped of its tax-exempt status as part of a religious organization because it had not used the fund for charitable purposes. In interviews with the Wall Street Journal, however, the church denied it had committed any tax violations.

Further Reading

SEC Reportedly Probes Mormon Church Over $100 Billion Investment Portfolio Allegedly Saved For 'Second Coming Of Christ (Forbes)

Mormon Church Reportedly Amassed $100 Billion Fund For 'Second Coming Of Christ' (Forbes)

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church of jesus christ of latter day saints

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Mormon Church Will Pay Millions In SEC Settlement Over Investment Portfolio Allegedly Saving For 'Second Coming Of Christ'

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A whistleblower said the church had deceived the public and SEC about funds preparing for the second coming of Christ.

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/ CBS News

A former senior portfolio manager who worked at the investment arm of the Church of Jesus Christ of Latter-day Saints alleges the firm masqueraded as a charity and violated its tax exempt status by directing funds built from member donations to bail out business with ties to the church.

David Nielsen filed a whistleblower complaint with the IRS in 2019. Nielsen says that during his nine years working at Ensign Peak Advisors, the value of the firm's investments ballooned past $100 billion. In his first public comments, Nielsen told 60 Minutes the firm used false records and statements to appear as a charity, while stockpiling money and misleading the church members.

"I thought we were going to change the world," Nielsen said. "And we just grew the bank account."

Each year, the Church of Jesus Christ of Latter-day Saints collects an estimated $7 billion in contributions from its 17 million members. The church expects members to participate in tithing by contributing about 10% of their income. Tithing is used to pay the church's bills and fund the church's programs. Whatever is left over, about $1 billion a year, is put into a reserve fund at Ensign Peak and invested.

As a registered nonprofit, those investments grow tax free, Nielsen said. Since it was created in 1997, he says the fund has swelled beyond $100 billion.

"You could solve big problems with $100 billion," Nielsen told 60 Minutes' Sharyn Alfonsi.

Nielsen said he left Wall Street in 2009 to work at Ensign Peak because he wanted to work for what he thought was a charity. He recalled thinking he could use his skills to do good.

"And the funds were never used for that," Nielsen said. "It was really a clandestine hedge fund."

In 2013, one of Nielsen's bosses shared a document at a meeting that showed $1.4 billion from Ensign Peak went to a mall being built on land owned by the church, the whistleblower said. Another $600 million was used to help prop up a for-profit, church-owned insurance company called Beneficial Life.

"Look, I'm not an expert on charities, but I'd been around the block enough to know that charitable organizations can't bail out for-profit businesses and maintain their charitable status," Nielsen said.

Christopher Waddell, one of three church bishops who oversee Ensign Peak, said David Nielsen's allegations are "flat-out wrong."

"The church actually owned Beneficial Life and fortunately the church had the resources to bail out Beneficial Life during the financial crisis, 2008, 2009," he said.

Waddell said the money given to the mall project was an investment, on which the church was receiving returns. He declined to disclose details of the investments. Unlike other nonprofits, religious organizations do not have to fully disclose all financial information to the IRS. He declined to share the value of Ensign Peak's assets with 60 Minutes.

"That's something I can't share with you right now," he said. "I know there've been reports on approximates and that kind of thing, and that's as far as we can go right now."

The bishop said Nielsen didn't have a full picture of church finances.

David Nielsen told us his breaking point came in 2018, when a website called "Mormonleaks" linked church members to companies that only existed on paper, Nielsen said. Those shell companies held billions of dollars in stocks and bonds, and were actually controlled by Ensign Peak.

Nielsen said the investment firm called an emergency meeting at which the chief investment officer said that if Ensign Peak were to start reporting the securities in the firm's own name, it could cause problems..

"I knew in that moment that I was in the wrong place," Nielsen said.

Nielsen resigned in 2019 and filed a whistleblower complaint with the IRS alleging that Ensign Peak violated its tax-exempt status by moving money to for-profit businesses. It wasn't until 2021 that Nielsen heard from investigators, but they weren't from the IRS, they were from the U.S. Securities and Exchange Commission. The SEC launched its own Ensign Peak probe after the "Mormonleaks" report linked the church to the shell companies.

In February, the SEC fined the Mormon church and Ensign Peak a total of $5 million for using shell companies to obscure the size of its investment portfolio. SEC investigators found the church "went to great lengths" to hide $32 billionin securities over nearly 20 years. It created 13 shell companies that were "assigned a local phone number that would go directly to voicemail" in case regulators checked in.

Waddell told 60 Minutes it was the church's lawyers who advised the church and Ensign Peak to create the shell companies. He said it wasn't about secrecy, but rather confidentiality.

"It's confidential in order to maintain the focus on what our purpose is and what the mission of the church is, rather than the church has X amount of money," Waddell said.

The status of the IRS investigation into the Mormon church and Ensign Peak isn't clear. The IRS does not comment on whistleblower complaints, which can take an average of 11 years to be resolved. Nielsen felt it was time for him to speak out.

"We gave the IRS and the SEC all the professional courtesy," Nielsen said. "This is just too important to fall through the cracks."

More from CBS News

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church of jesus christ of latter-day saints

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Whistleblower: Mormon church investment fund stockpiled money, masqueraded as a charity

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David Nielsen, who worked at Ensign Peak Advisors - the Church of Jesus Christ of Latter-day Saints' investment firm - filed an IRS complaint about the firm. He explained his allegations to Sharyn Alfonsi.