Today’s court approval brings to a close a 7½-year SEC investigation and civil litigation. We are committed to delivering high quality financial services that comply with the highest legal standards to serve our individual and institutional customers in more than 75 countries.
Hamilton, Bermuda (Vocus) October 18, 2010
LOM (Holdings) Limited announced that the U.S. District Court in New York (Southern District of New York) has approved a settlement with the U.S. Securities and Exchange Commission (SEC) (case number 1:07-cv-11387-DLC) resolving allegations that involved trading of Sedona Software Solutions Inc. and SHEP Technologies Inc. in 2002 and 2003.
As part of the resolution, LOM (Holdings) Limited, the public parent company, was dismissed entirely from the proceedings. Without admitting or denying any allegations in the SEC complaint, and without any adjudication of fact or law, five LOM subsidiaries and Scott Lines, LOM’s CEO, entered into settlements and agreed to be enjoined from future violations of certain federal securities laws and SEC rules.
'We are pleased to conclude this matter with the SEC,' said LOM board member Quinton Edness. “This settlement is in the best interest of LOM, its customers and shareholders. LOM’s Board looks forward to the continued leadership of Scott Lines and the management team.'
Scott Lines said, “Today’s court approval brings to a close a 7½-year SEC investigation and civil litigation. We are committed to delivering high quality financial services that comply with the highest legal standards to serve our individual and institutional customers in more than 75 countries.”
Under the settlement, the LOM subsidiaries will pay a civil monetary penalty of $450,000 and Mr. Lines will pay a civil monetary penalty of $50,000. The subsidiaries, Scott Lines and Brian Lines, a former LOM executive, agreed to disgorge profits of $1,277,403 plus accrued interest of $654,918. The penalty will not have a material effect on the financial statements of LOM; the majority is covered by a provision already made by LOM for litigation-related costs in 2007. All the disgorgement funds have been paid into escrow; LOM will not pay any portion of the disgorgement.
As part of the settlements, the LOM subsidiaries agreed to:
- Not maintain accounts for U.S. customers for two years. LOM ceased accepting new accounts for U.S. residents in 2001.
- Not trade in securities on the U.S. OTC-Bulletin Board or Pink Sheet markets for two years. LOM’s dealing in the two U.S. markets was substantially curtailed to a negligible amount in 2005, following an internal policy change.
- Engage an independent consultant who will monitor compliance with the settlements.
LOM Group subsidiaries included in the settlement are Lines Overseas Management Limited, LOM Capital Limited, LOM Securities (Bermuda) Limited, LOM Securities (Bahamas) Limited, and LOM Securities (Cayman) Limited.
Brian Lines, formerly LOM’s president, reached a settlement with the SEC that was likewise finalized today. Brian Lines resigned his position with LOM and left the company in 2005.
The LOM Group is a self-clearing investment management firm providing a full range of investment services and products through its regulated subsidiaries in Bermuda and Bahamas and marketing office in London, England. LOM has nearly $1 billion in client assets under administration and provides brokerage, asset management, and corporate finance services to its primarily high net-worth individual and institutional customers in more than 75 countries. The parent company, LOM (Holdings) Limited, is publicly listed on the Bermuda Stock Exchange (symbol LOM BH).
For more information go to http://www.lom.com.