The Church of Jesus Christ of Latter-day Saints and its investment advisory firm agreed to pay a total of $5 million to settle charges from the Securities and Exchange Commission (SEC) that both entities conspired to obscure the value of the church’s investments over more than two decades.

Utah-based Ensign Peak Advisors agreed to pay a $4 million penalty and the church a fine of $1 million to resolve allegations they violated federal securities law with a scheme to create shell companies that obscured the size of the church’s portfolio, which grew to approximately $32 billion by 2018. The alleged scheme took place from 1997-2019.

“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 Grewal, director of the SEC’s Division of Enforcement, in a press release Tuesday.

Ensign Peak is an institutional money manager acting on behalf of the church that is required under federal securities law to file Form 13F with the SEC each quarter, according to the agency’s order.

Starting in 1997, Ensign Peak began managing approximately $7 billion in assets for the church. Church leaders were concerned if Ensign Peak began disclosing the full sum of these assets it would lead to “negative consequences in light of the size of the church’s portfolio,” according to the order.

Ensign Peak began creating LLCs with no business purpose other than to hide the church’s assets from public scrutiny, which the SEC called “clones.” As the media and third parties began connecting these LLCs back to the church, church leaders agreed to “gradually and carefully adapt Ensign Peak’s corporate structure to strengthen the portfolio’s confidentiality,” according to the order. The clone LLCs only had a business address, local phone number that accepted voicemails, and a business manager (usually a church member) who signed the SEC forms.

In filings with the agency, each of the LLCs claimed to have sole investment discretion for the securities listed under its control. In reality, Ensign Peak retained complete control of those investments, the SEC said.

Two internal church audits of Ensign Peak—one in 2014 and another in 2017—reviewed the LLC structure and, while not recommending any changes, noted there was a risk “that the SEC might disagree with the approach,” the agency stated.

In February 2020, Ensign Peak filed a consolidated Form 13F with the SEC, listing all $37.8 billion of the church’s assets and the names of the LLCs.

In a statement, the church said 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.”

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