US Securities and Exchange Commission representatives will travel to Bermuda or elsewhere on Scott Lines? tab after a US court ordered his deposition to be resettled outside the US.

Despite SEC opposition, Magistrate Judge Alan Kay yesterday granted the resettlement of the deposition of Lines Overseas Management?s managing director, which is required under two-year-old SEC subpoenas related to an SEC probe of possible fraud and manipulation involving Sedona Software Solutions and SHEP Technologies.

Yesterday, a spokesperson for LOM said: ?We are pleased that Judge Kay has taken reasonable steps to protect Scott Lines? rights as a witness, while at the same time accommodating the SEC?s interest in obtaining information.?

Mr. Lines? motion was supported by a ?good cause? of burden and annoyance since Mr. Lines argued that as managing director of LOM it would be burdensome for him to travel to the US, the Magistrate Judge wrote in his ruling. He also noted that Mr. Lines had expressed concern that if he did reenter the US, the SEC or Justice department may serve additional subpoenas on him, or take other action on a claim that he is a material witness.

The SEC had dismissed the idea of enforcing the subpoenas as ?subterfuge to lure Mr. Lines into the US in order to expose him to further service of legal process? and objected to the resettlement on a number of other grounds including the ?unprecedented requirement of mandating a four person investigative team travel to a foreign country to perform their official duties as an accommodation to a person that the Court has personal jurisdiction over?.

Magistrate Judge Kay, however, took into consideration Mr. Lines? offer to cover the expenses associated with his proposed alternatives and also agreed that the deposition testimony will be taken under oath, or with equal force, under penalties of perjury, in accordance with US law.

He rejected Mr. Lines? offer to be deposed by videoconference on the grounds that the SEC would be prejudiced by such an examination since the Commission staff has numerous documents and audio recordings that it must use in examining Lines and its investigators must personally observe witnesses through live testimony.

The Magistrate Judges said, however, the SEC had not indicated that it will suffer prejudice in conducting the deposition in-person, in a venue other than the US and noted that the SEC had previously offered to take Lines? testimony in Bermuda on the grounds of the US consulate.

The court ordered that the ?deposition of Scott Lines will be taken in person, at a location other than the United States such as Bermuda, Toronto, or another mutually acceptable place other than in the US?. He also mandated that it be conducted at a US embassy or consulate and that it be taken under oath, or with equal force, under penalties of perjury, subject to US law.

Magistrate Judge Kay instructed Mr. Lines to cooperate fully with the SEC in arranging the deposition, bear the travel and per diem costs for two SEC lawyers and complete the deposition within 30 days. It remains to be seen whether the SEC will travel to Bermuda or whether the parties will choose an alternative location. The SEC pointed out in its motion against resettlement that the Commission staff, as US officials, cannot simply travel to Bermuda on their own accord and engage in a US-related law enforcement activity on foreign soil, but must must receive express permission from the Bermuda government for the Commission staff to enter their country.

LOM?s spokesperson said yesterday that the company ?would naturally prefer a Bermuda location, as it would accommodate Scott?s management duties, and we hope to confirm this shortly with the SEC?.

However, Mr. Lines previously suggested meeting in Canada and yesterday the court proposed the City of Toronto as a possible alternative deposition site to Bermuda.