Mormon Church Fined for Dishonesty

Mormon Church fined for dishonesty
Hello, my name is Danny. I was an active Latter-day Saint for 60 years.
From my youth, I was exposed to the 13 Articles of Faith of the Church of Jesus Christ of Latter-day Saints and was encouraged to commit them to memory. The Articles of Faith written by Joseph Smith in 1842, was canonized as scripture in the Pearl of Great Price. Basically, it is a statement of faith or a creed by which Latter-day Saints should live their lives – to be in good standing as members of the Mormon Church.
It states in Article of Faith #12 “We believe in being subject to kings, presidents, rulers, and magistrates, in obeying, honoring, and sustaining the law.” And #13 “We believe in being honest, true, chaste, benevolent, virtuous, and doing good to all men, etc.”
Are these genuine statements of faith or are they simply platitudes. Based on the shocking news of 2023 – we learned that top LDS leadership were involved in intentionally violating those two Articles of Faith by not “obeying, honoring, and sustaining the law.” And by not “being honest and true.”
Why am I saying all of this? Because I have in my hands proof that – The Corporation of the Church of Jesus Christ of Latter-day Saints intentionally violated federal Securities and Exchange Commission laws for nearly three consecutive decades, before eventually getting caught.
The reason I am raising this issue – is because I’ve heard that the LDS Church might currently be under investigation by the IRS for tax evasion. Which would not surprise me in the least based on the church’s track record and history. Also, I promised in my recent videos titled “Truth about Tithing” part 1 and 2, that I would record a video addressing how the LDS Church has been using tithing donations in ways that might both surprise and frustrate you as a member of the Church. So, let’s get started.
I have right here a copy of the February 21, 2023, nine-page cease-and-desist Order from the United States Securities and Exchange Commission. In the Matter of Ensign Peak Advisors and the Church of Jesus Christ of Latter-day Saints. A cease-and-desist proceeding is a formal legal process initiated when someone sends a letter demanding that another party immediately stop certain harmful or illegal behavior. It is often a precursor to a lawsuit, intended to resolve the issue through a settlement without going to court.
If you don’t already know – Ensign Peak Advisors, Inc. is a Utah nonprofit corporation responsible for investing and managing the reserves of the LDS Church. Ensign Peak is governed by a Board of Trustees, consisting of the three members of the Church’s Presiding Bishopric and the Managing Director of Ensign Peak. Ensign Peak’s Managing Director is appointed by the Church’s First Presidency and reports directly to the senior leadership of the Church – which is comprised of the First Presidency and Presiding Bishopric.
If you want to follow along with me, you can go to SEC.gov > SEC Charges the Church of Jesus Christ of Latter-day Saints > SEC Order. There you can print the order or read it online. For the sake of time, I’m not going to read the entire Order. But I do want to read some highlighted statements – and then make a few comments regarding them. Follow the timelines.
Facts of the Order: The Church created Ensign Peak in 1997 to manage it’s “reserve funds” purchased with excess tithing, income and returns generated by Ensign Peak. At its inception, Ensign Peak managed approximately $7 billion of Church assets under Form 13F. Those securities grew to approximately $37.8 billion by 2020. Throughout its history, Ensign Peak was required to file quarterly Forms 13F identifying and providing certain information about the Securities it managed for the Church.
By 1998, senior management at Ensign Peak was aware of its requirement to file Forms 13F and communicated this to senior leadership of the Church.
7. To prevent disclosure of the securities portfolio managed by Ensign Peak, the Church approved Ensign Peaks’s plan of using other entities, instead of Ensign Peak, to file Forms 13F. 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. (The Church was worried members might quit paying tithing once they learned where it was being invested and to what extent it had increased in the Stock Market) Ensign Peak did not have the authority to implement this approach without the approval of the Church’s First Presidency. (This included top Senior leadership throughout three consecutive First Presidency administrations of Gordon B. Hinckley, Thomas S. Monson, and Russel M. Nelson.)
In 2001, Ensign Peak created an LLC (Limited Liability Company) and filed the first form 13F with the approval of the Senior leadership of the Church. This first LLC was assigned a location in Glendale, CA, although it conducted no business there. Certain Ensign Peak’s employees were assigned to be investment managers for that LLC. However, Ensign Peak failed to transfer any investments there.
In 2005, Ensign Peak formed a second LLC with location in Wilmington Delaware and filed Forms 13F in the name of this new LLC.
In 2011, Ensign Peak became concerned that its portfolio had become so large that the Form 13F filings that it made using the name of the 2nd LLC might attract unwanted attention. So, Ensign Peak sought the Church’s approval to form additional LLCs to file Forms 13F. On May 19, 2011, the Church’s senior leadership approved Ensign Peak’s recommendation s to “clone” the second LLC to create new Form 13F filers.
After obtaining Church approval, Ensign Peak formed 5 new Clone LLCs for the purpose of filing Forms 13F. Each of these new entities was given Delaware addresses, although none of the LLCs conducted business in Delaware.
In 2015, a third party connected the holdings of various LLCs and traced them back to Ensign Peak. Ensign Peak brought this to the attention of Church leadership. The senior leadership of the Church approved Ensign Peak’s recommendation to “gradually and carefully adapt Ensign Peak’s corporate structure to strengthen the portfolio’s confidentiality.”
Finally, on November 6, 2015, the senior leadership of the Church approved Ensign Peak’s plan for the creation of additional Clone LLCs to further prevent disclosure of the Church’s holdings managed by Ensign Peak. Ensign Peak then formed 6 additional Clone LLCs, bringing the total to 12.
Ensign Peak had authority over all the LLCs throughout their existence. The Church also had indirect authority over all these LLCs, since the Church controlled Ensign Peak and approved the approach of using the LLCs to file Forms 13F.
These Clone LLCs never exercised investment discretion of the Church’s assets. Their investment managers did not know which assets were allocated to the Clone LLCs and performed no functions for the LLCs.
Each Clone LLC was set up with a “Business Manager,” who according to the terms of the LLC agreements, had responsibility for the preparation and filing of the Company’s governmental reports, returns, notices and the like. However, the Business Managers performed no functions for the Clone LLCs outside of simply signing the Form 13F signature pages each quarter.
Ensign Peak was responsible for designating the Clone LLCs’ Business Managers, many of whom were Church employees. Business Managers were selected because they had common names and a limited presence on social media and were therefore less likely to be publicly connected to Ensign Peak or the Church. (You can see the obfuscation here) Ensign Peak provided the Business Managers with very limited information about the Clone LLCs or why they were created.
Each Clone LLC was given an address outside of Utah although none of them conducted any business at those locations other than the receipt of mail. Ensign Peak chose multiple locations across the country for these purported offices to create the impression that the Clone LLCs conducted business operations throughout the US, making it more difficult to trace the Clone LLCs back to Ensign Peak or the Church. (How can you call that being “honest and truthful?”)
Each Clone LLC was also assigned a local phone number that would go directly to voicemail. An Ensign Peak senior manager instructed a Business Manager of one of the Clone LLCs to notify him of all voicemails from regulatory agencies to any of the Clone LLCs, but to delete all others. (Sneaky)
Ensign Peak Filed Misstated Forms 13F: After the Clone LLCs were formed, Ensign Peak prepared and filed Forms 13F with the Commission under the names of the Clone LLCs.
Each Form 13F filed in the name of a, Clone LLC misstated (in other words – lied) that the LLC had sole investment discretion for the securities listed, that there were no other managers for these securities, and that the Clone LLC had sole voting discretion over these securities. Ensign Peak continued to manage the entire portfolio.
Each Form 13F was signed by the designated Business Manager. However, Ensign Peak provided the Business Managers with insufficient information about the Clone LLCs or the securities assigned to them that would enable the Business Managers to represent with their signatures, that all the information was true, correct, and complete. And the Business Managers were only given the signature pages of the Forms 13F and not the complete documents. In addition, Forms 13F were often filed with electronic signatures before Ensign Peak actually obtained the Business Manager’s handwritten signatures.
Each Form 13F also misstated, that the Business Manager signed the Form 13F from the address listed on the signature page. In fact, all Business Managers were, located in Salt Lake City, and the addresses on the forms were used to convey the impression that the Clone LLCs were located across the country. (Making liars out of those coerced employees pretending to be business managers of the Clone LLCs)
(Here’s an important paragraph) Throughout its history, at least once a year, Ensign Peak’s Managing Director met with the senior leadership of the Church (First Presidency and Presiding Bishopric) to discuss Ensign Peak’s activities, including at times the LLC Structure. Unanimous approval from the senior leadership of the Church was required before Ensign Peak could deviate from the LLC Structure and file Forms 13F in Ensign Peak’s own name.
The Church and Ensign Peak continued to take the same approach in filing Forms 13F through the Clone LLCs despite two Church Audit Department internal audits of Ensign Peak – on 2014 and one in 2017 – that reviewed the LLC Structure. In discussions with Ensign Peak’s senior management, although the Church Audit Department did not recommend specific changes to the LLC Structure, the Church Audit Department highlighted the risk that the SEC might disagree with the approach. (So, they had been warned)
The LLC Structure was made public: In May 2018, a public website reported that various entities that appeared to have ties to the Church had filed Forms 13F revealing holdings of approximately $32 billion. The website referenced evidence indicating that these entities domain names were all registered to an entity tasked with overseeing and protecting the intellectual property of the Church, and that each of the LLCs identified listed a Business Manager whose name matched that of a Church employee.
After the website reported this information, two Business Managers resigned their roles, voicing concerns about what they had been asked to do. (They did the honest thing) Rather than changing the LLC Structure, two new Business Managers were assigned to replace the two who resigned. (The Church President and his counselors were determined to proceed with this illegal practice)
Ensign Peak continued to file Forms 13F through the Clone LLCs until February 14, 2020, when Ensign Peak decided to file a consolidated Form 13F for the quarter ended December 31, 2019. Ensign Peak’s Form 13F consolidated securities previously listed on the various Forms 13F filed in the names of the Clone LLCs. Consequently, Ensign Peak first original Form 13F disclosed its management of Securities valued at approximately $37.8 billion.
Violations: As a result of the conduct described above, Ensign Peak violated Section 13(f)(1) of the Exchange Act and Rule 13f-1 thereunder by failing to file Forms 13F in Ensign Peak’s name. Similarly, Ensign Peak violated the same Section by filing misstated Forms 13F in the names of LLCs created for the sole purpose of filing Forms 13F. As a result of the conduct described above, the Church caused Ensign Peak’s violations of the Section listed.
In view of the foregoing, the Commission deems it appropriate to impose the sanctions agreed to in Respondent’s Offers. (The Commission agreed to accept the Church’s offer to settle outside of court)
Accordingly, it is hereby ordered that: Respondent Ensign Peak cease-and-desist from committing or causing any violations and any future violations of Section 13(f) of the Exchange Act and Rule.
Pursuant to Section 21 C of the Exchange Act, Respondent the Church shall cease-and-desist from committing or causing any violations and any future violations of Section 13(f) of the Exchange Act and Rule.
Fines: Ensign Peak shall, within 10 days of the entry of this Order, pay a civil money penalty in the amount of $4,000,000 to the Securities and Exchange Commission.
The Church shall, within 10 days of the entry of this Order, pay a civil money penalty in the amount of $1,000,000 to the Securities and Exchange Commission.
Okay, that’s it! Ensign Peak along with the Church of Jesus Christ of Latter-day Saints in violation of the law had to pay a combined fine of $5 million. Which sounds like a lot of money, but it is nothing when you consider the LDS Church is now worth approximately $300 billion. It’s like a slap on the wrist. It made the $5million back within a couple hours.
The Church was worried about the public and members knowing how much money it was hoarding. Why would knowledge of the truth have negative consequences for the Church? Members might quit paying, tithing after learning how much wealth the Church has accumulated. Plus, the fact that their hard-earned income was being invested in the stock market instead of using the “sacred offering” to directly bless the lives of the less fortunate.
October 2019 President Russell M. Nelson continued his fervent focus on improving the faith’s temple worship Sunday at the concluding session of the 189th Semiannual General Conference. He read an updated list of questions Church members will be asked when receiving a temple recommendation from their bishop.
LDS Temple Recommend Interview questions:
#9 Do you strive to be honest in all that you do?
#15 Do you consider yourself worthy to enter the Lord’s house and participate in temple ordinances?
Considering the SEC Order we just read, is Senior Leadership of the LDS Church worthy of a temple recommendation? By, intentionally violating the law, NONE of the 3 members of the First Presidency or 3 members of the Presiding Bishopric for three administrations – could or should have answered “yes” to question 9 and 15. Because they didn’t strive to be honest and shouldn’t consider themselves worthy to go to the temple.
In its Press Release on February 21, 2023, the US SEC stated “We allege that the LDS Church’s investment manager (Ensign Peak) with the Church’s knowledge (First Presidency and Presiding Bishopric) went to great lengths to avoid disclosing the Church’s investments, depriving the Commission and the investing public of accurate market information.”
Then, on the same day the LDS Church Newsroom issued a statement that “Church’s senior leadership received and relied upon legal counsel when it approved of the use of the external companies to make the files.” (Of course, they are going to throw their attorneys under the bus, when they don’t have any part of this scam. That’s the way it always works – blame it on the lawyers for giving bad advice) Then the statement says, “We reached resolution with the SEC. We affirm our commitment to comply with the law, regret mistakes made, and now consider this matter closed. (Do they mean regretting the mistakes of getting caught?) In 2015, Apostle Dallin Oaks of the First Presidency said, “The Church does not seek apologies, and we don’t give them.” (So that is how the Church – namely the Senior Leadership avoids having to say its sorry and repents of their actions. They now consider the matter closed. That’s a message to the church members not to discuss this matter in the future)
But every misfiling and every shell company was directly approved by the First Presidency and Presiding Bishopric. These six men are highly educated men and knew fully well what Ensign Peak was doing in hiding the Church’s assets.
Current 2025 – First Presidency: Russell Nelson (Renown Heart Surgeon, MD) Henry Eyring (Harvard Business, Stanford professor of business) Dallin Oaks (Law Professor, Supreme Court Judge).
Current 2025 – Presiding Bishopric: Gerald Causse (Business Master’s degree) Christopher Waddell (Merrill Lynch Vice-president of investments) Todd Budge (President and CEO of Tokyo Star Bank).
These six top executives of the LDS church are guilty of intentionally breaking Federal Law. Top executives of secular corporations usually step down, resign, or are fired when they intentionally violate Federal laws. Shouldn’t these men do the same? Sometimes, guilty parties serve jail or prison time for their crimes.
In my opinion, the LDS Church is not run by God’s prophets as in Bible times. It is run by Profit-Managers – lawyer’s and educated businessmen. These 15 men are not theologians; they are business executives. They are running a multi-hundred-billion-dollar corporation under the guise of religion. Their primary goal is to grow the church financially. They are investing donated tithing funds they call “sacred,” to turn a profit. They call it a rainy-day fund for the Second Coming – as if Jesus needed money. The LDS Church has become the wealthiest religious institution in the world at 300 billion dollars and increasing. Some people might say that prosperity is the sign of a true church. But I say, it is the sign of man-made material religion. These men who are propped up to be representatives of Jesus Christ are at odds with what is written in their own scriptures.
What would Jesus Christ have to say about all of this. According to the scriptures, what advice would He give to these leaders? Would He command them to bury their treasure – to hide it in false LLCs? Would He command them to deceive the public and members by setting up shell companies? Would He tell them to be dishonest and violate the laws of the land? Or would Jesus tell these leaders to give it away to the poor? Build homeless shelters, hospitals, schools, dig wells, cure disease, cure hunger?
If Jesus was running the Mormon Church, would it look like it does today? Would He be investing tithing money into temple buildings, malls, cattle ranches, farmland, apartment and office buildings? Would He be telling the poorest of poor to pay their tithing first?
I don’t think the church would look anything like it does today, if Jesus was running it. In fact, Jesus gave some powerful teaching concerning this very subject.
Mark 11:15-17 “And they come to Jerusalem: and Jesus went into the temple and began to cast out them that sold and bought in the temple, and overthrew the tables of the moneychangers, and the seats of them that sold doves; And would not suffer that any man should carry any vessel through the temple. And he taught, saying unto them, Is it not written, My house shall be called of all nations the house of prayer? but ye have made it a den of thieves.” This reminds me of how Jesus would have reacted to the Security Exchange Commission charges against the LDS leaders. How is it any different? You can’t make a profit off the salvation of men and women. Has the Mormon Church also become “den of thieves?”
The top leadership claims it is saving up for a rainy day. Jesus taught, Mark 6:19-21 “Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break through and steal: But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal: For where your treasure is, there will your heart be also.”
Jesus makes the point that we can know the heart of these LDS leaders by where they are laying up their earthly treasures. Their hearts are full of greed and pride.
Jesus Counsels the Rich Young Ruler: Matthew 19:16-22 “Now behold, one came and said to Him, “Good Teacher, what good thing shall I do that I may have eternal life? So He said to him, Why do you call Me good? No one is good but One, that is, God. But if you want to enter, into life, keep the commandments. He said to Him, “Which ones?” Jesus said, You shall not murder,’ ‘You shall not commit adultery,’ ‘You shall not steal,’ ‘You shall not bear false witness,’ ‘Honor your father and your mother,’ and, ‘You shall love your neighbor as yourself.’ The young man said to Him, “All these things I have kept from my youth. What do I still lack? Jesus said to him, “If you want to be perfect, go, sell what you have and give to the poor, and you will have treasure in heaven; and come, follow Me.” But when the young man heard that saying, he went away sorrowful, for he had great possessions.”
Ironically, the Church’s yearly theme for its correlated curriculum is “Come Follow Me.” Here, Jesus is telling the young man to sell all they have and give it to the poor. If LDS leaders did the same, then they could truly “come follow Him.” But they won’t – because just like the young man, they would be sorrowful, for they have “great possessions.” All of this should cause every Latter-day Saint great concern about who is truly running the Mormon Church. I’m convinced that Jesus Christ would be appalled that all this dishonesty and hypocrisy is being carried out in His name. Something to consider.
Thanks for watching. Catch more videos like this on YouTube or at Talking to Mormons.com.
God Bless!