LOM (Holdings) Ltd. announced today that the US District Court in New York has approved a settlement with the US Securities and Exchange Commission (SEC) resolving allegations that involved trading of Sedona Software Solutions Inc. and SHEP Technologies Inc. in 2002 and 2003.

The agreement involves a combined payment of more than $2.4 million in civil monetary penalties, profit disgorgement and accrued interest by LOM subsidiaries, LOM CEO Scott Lines and former LOM president Brian Lines.

None of the parties admitted or denied any allegations in the SEC complaint. The US regulator had claimed that they had engaged in a “pump and dump” scheme involving trading of Sedona and SHEP.

In their submissions during the long-running case, LOM and the Lines brothers denied the fraud allegations and argued that all the cases involved legitimate business opportunities.

As part of the resolution, LOM (Holdings) Limited, the public parent company, was dismissed entirely from the proceedings.

“Today’s court approval brings to a close a seven-and-a-half—year SEC investigation and civil litigation,” Scott Lines said in a statement. “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 Scott Lines will pay a civil monetary penalty of $50,000. The subsidiaries, Scott Lines and Brian Lines agreed to disgorge combined profits of $1,277,403 plus accrued interest of $654,918.

LOM said it will not pay any of the disgorgement and that the penalty would not have a material effect on the financial statements of LOM, since the majority is covered by a provision already made by LOM for litigation-related costs in 2007.

Also under the terms of the agreement, LOM agreed not to maintain accounts for US customers for two years, not to trade in securities on the US OTC-Bulletin Board or Pink Sheet markets for two years and to engage an independent consultant who will monitor compliance with the settlements.

LOM director Quinton Edness said: “We are pleased to conclude this matter with the SEC. 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.”

Brian Lines, formerly LOM’s president, reached a settlement with the SEC that was likewise finalised today. Brian Lines resigned his position with LOM and left the company in 2005.

Full story in the business section