The auditor for Lines Overseas Management has sworn in an affidavit that he may have erred in his testimony before US Securities and Exchange Commission inspectors last year.

In its motion to strike the SEC status report filed with the US District Court, LOM took issue with the SEC's assertion that LOM "may" have destroyed tape recordings which the SEC had requested under subpoena as part of its investigation into alleged market manipulation of the security Sedona Software Solutions.

The SEC responded by pointing to the "credible evidence of the sworn testimony of a "disinterested third-party professional" retained by LOM to perform an audit of LOM's financial statements."

It also included excerpts from a December 2005 interview that its inspectors held in Washington with that auditor, Chartered Public Accountant John Green, who is an audit partner with the Long Island-based firm Marcum & Kliegman.

However yesterday LOM filed another court document including a declaration from Mr. Green stating that he had not read the transcript of the SEC investigative interview and he may need to make changes to it upon review.

In the SEC interview, Mr. Green said that Susan Wilson, who is a LOM director and chairman of LOM's Audit Committee, told him that there were tape recorded conversations that related to the Sedona matter.

He said that she told him that "they were reviewed in order to try to corroborate or verify the story that, Brian Lines had about panicking and wanting to sell stock".

When the SEC asked whether LOM provided any other information concerning the substance of the telephone recordings that it taped, Mr. Green said "In practice, they represented to me at that same meeting that all the tapes had been destroyed, and they had discontinued the practice of taping conversations."

The SEC asked him "which tapes" had been destroyed to which he replied, "all the tapes that they ever had of conversations with customers has been destroyed.".

The SEC asked him whether this included the tapes related to Sedona and he replied: "That's what I understood that to mean, yes."

But in yesterday's declaration filed by LOM, Mr. Green said "I never testified before the SEC that anyone at LOM Holdings or that LOM (Holdings) itself, destroyed any documents or anything."

Rather he said he told the SEC, "that I did not know who destroyed or discarded any thing, and that I did not know who made any such decision to do so".

He adds that his testimony in respect to the destruction of tapes, "may have been in error".

Mr. Green said that two groups of tapes had been discussed at the time and during the SEC testimony. The first were day-to-day tape recordings of all telephone conversations on certain extensions at LOM and the second tapes were of interviews of certain LOM directors, officers and employees made during the Deloitte & Touche investigation for the BMA.

"I was in error in testifying that I was told that any of the day-to-day tapes were destroyed by anyone. Rather, I understood that the tapes concerning those interviews, which were turned over to the BMA, may have been destroyed."

He added that he was "not informed about who had destroyed them but assumed "someone at Deloitte & Touche or the BMA had done so".

The SEC asked Mr. Green whether Ms Wilson had mentioned that she was the aunt of Scott Lines and former president Brian Lines. Mr. Green responded in the affirmative.

On Monday, lawyer Timothy Marshall sent this newspaper Ms Wilson's response to Mr. Green's testimony to the SEC.

"Any inference the SEC is attempting to make that whatever attenuated relationship I have with Brian Lines would cause me to abandon my professional judgement and principles is unsupported and false," she said in a letter to this newspaper, pointing out that she is not his aunt and only shares a common great grandfather with their father Donald.

LOM's compliance officer Scott Hill responded to the allegation in an earlier court filing by stating that he continues to maintain "custody and control "over the tape recordings in question and that after December 29, 2005 he took steps to confirm that the tape recording remain undisturbed.

In her letter to this newspaper and in a subsequent affidavit submitted to the US court, Ms Wilson denied ever having a conversation with Mr. Green in which she suggested that LOM destroyed any telephone tape recordings.

She added that that she believes LOM took every reasonable step to preserve tape recordings of telephone calls related to the Sedona matter and she has been informed that LOM still has possession of those tape recordings.

She adds that she did not tell Mr. Green that anyone else had destroyed any tape recordings of telephone conversations related to Sedona.