Investment Adviser Fined for Failing to Disclose Holdings

An investment adviser operated by The Church of Jesus Christ of Latter-day Saints settled SEC charges for failing to file a Form 13-F, which requires quarterly public disclosure of the equity portfolios of an entity holding at least $100 million in securities assets.

According to the SEC Order, the Church established numerous separate shell LLCs in order to "obscure the amount of the Church's portfolio" and thus to avoid the requirement of public disclosure. As a result, the SEC determined that the adviser to the Church violated SEA Section 13(f)(1) ("Periodical and other reports") and SEA Rule 13f-1 ("Reporting by institutional investment managers of information with respect to accounts over which they exercise investment discretion").

To settle the charges, the adviser agreed to (i) cease and desist and (ii) pay a civil monetary penalty of $4 million. As part of the settlement, the Church agreed to pay an additional $1 million penalty.