By now, I assume you’ve heard that the church and Ensign Peak Advisors have settled an SEC investigation, with EPA agreeing to pay a $4 million fine and the church agreeing to pay a $1 million fine. (If you haven’t, you can see some excellent reportage on the issue here, here, and here, among other places.)

So what should practicing members make of this? I think it’s tough, and I’ll try to address that at the end of the post. But first, what exactly happened?

On Not Filing Form 13F

To understand what’s going on here, we need to start with Rule 13f. Under Rule 13f, investment managers must file a quarterly report with the SEC where (a) they “exercise investment discretion” over (b) accounts containing at least $100 million of (c) “13(f) securities.” (13(f) securities are basically stock traded on a securities exchange.)

Between 1997 (when it was formed) and 2019, Ensign Peak Advisors did not file a Form 13F.

But it’s not just that EPA didn’t file a 13F for 22 straight years. It’s that EPA, at church leaders’ behest, structured their investment to avoid the rules.