Almost two years after being subpoenaed to testify before US Securities and Exchange enforcement officers in a market manipulation probe, the managing director of Lines Overseas Management has agreed to comply. Scott Lines has asked a US Court, however, to allow the location for his testimony to be resettled outside of the United States.

In April 2004, the SEC served subpoenas on Scott Lines and LOM for documents, phone records as well as Mr. Lines? in person testimony as part of its probe of possible fraud and manipulation involving Sedona Software Solutions and SHEP Technologies, including alleged possible misconduct by LOM, Scott Lines and his brother Brian.

LOM and the Lines brothers deny any wrongdoing, but challenged the subpoenas on jurisdictional and legal grounds.

Mr. Lines? move to finally testify comes after both the US District Court and the US Court of Appeals for the District of Columbia turned down LOM?s and Mr. Lines? motion for a stay pending appeal of a US Magistrate Judge?s order compelling compliance with the subpoenas.

In his motion filed with the US District Court this week, Mr. Lines offered to pay for a video conference hook-up or for the usual travel and per diem costs for two SEC attorneys to travel to Bermuda or elsewhere as ?reasonable alternatives? to having to come to the US.

He asserted that the alternative methods of testimony should be allowed on the grounds that even if a US court could order a foreign national over whom it has personal jurisdiction to testify, it could not compel a foreigner to travel to the United States to provide testimony. Mr. Lines said he is a British national residing in Bermuda.

He asked the court to issue an order directing that any testimony be taken either by video conference link between the SEC?s Washington office and the offices of Bermuda counsel or by an in-person appearance at any reasonable non-US location ?ideally Bermuda?.

?These are acceptable alternatives because the testimony would still be taken under oath or, with equal force, under penalties of perjury? in compliance with US law, the Lines motion said pointing to ?very substantial reasons? for asking for an alternative location.

On his last trip to the US to visit a cardiologist for his heart condition, the SEC served Mr. Lines with the Sedona subpoenas.

The SEC also claims that it served similar additional subpoenas on his father and LOM president Donald Lines last November when he visited the US for a coronary medical procedure.

Donald Lines disputes that he was ever served, however, his son said in his motion that if he again enters the US, ?the SEC or the Justice Department may serve additional subpoenas on him, or take other action on a claim that he is a material witness?.

He added that his duties as managing director of ?one of Bermuda?s leading financial institutions ? the largest non-bank broker-dealer in Bermuda ? make it burdensome for him to travel to the US for testimony?.

Despite asking for the order, Mr. Lines? reserved his previously stated objections to the SEC?s subpoenas and continued his call for the Court to reject the findings that led the Magistrate Judge to issue the compliance order one year ago.

If the Court?s finding go in LOM?s favour, Mr. Lines said he would ask the Court to strike and suppress testimony taken in violation of established principles of jurisdiction and international law.

LOM and Mr. Lines have said that they have begun to hand over documents the SEC requested under subpoena, but in its own court filing this week, the SEC noted that there had only been a partial production of the items. While the SEC said it has obtained most of the items called for by the Sedona/SHEP subpoenas from other sources, it continues to seek LOM telephone records, including tape recordings of phone calls and documents concerning the investigation by the Bermuda Monetary Authority of LOM?s role in the alleged Sedona market manipulation.

The SEC also wants records including tape recordings concerning each account at LOM that bought, sold, held, owned or transferred Sedona or SHEP stock.

LOM claims that it is prevented from turning over all of the information requested by the SEC because former president, Brian Lines, obtained an injunction from the Bermuda Supreme Court preventing the disclosure of ?recordings or transcripts of conversations? that were made on his telephone extension while he appeals an earlier order by the Bermuda court allowing these records to be turned over to the SEC.

The SEC asserted in its latest filing that LOM failed to apprise the Bermuda court of facts crucial to its consideration of the SEC request including a declaration by an SEC inspector and LOM?s own 2003 financial report which discusses the SEC?s allegations in great detail.

The SEC also alleged that Brian Lines? opposition in the Bermuda court is ?an attempt to use the duty of confidentiality to shield his own improper conduct from the SEC?.

The Bermuda Court of Appeals is expected to hear the case this month.