Scott Lines, the managing director of Bermuda-based investment firm Lines Overseas Management, has been ordered to appear before a US court in October as part of an ongoing securities fraud investigation.

The company and its senior managers ? Mr. Lines and his brother, LOM president Brian Lines ? have come under fire from both US and Canadian regulators after they refused to hand over documents earlier this year, saying they were prevented from doing so under Bermuda law.

However, a recent amendment to Bermuda legislation changed that and now gives the Island?s regulators at the Bermuda Monetary Authority (BMA) the power to hand over LOM documents to foreign regulators if asked for them because of a bona fide regulatory investigation.

Now American regulators at the US Securities and Exchange Commission (SEC) have petitioned Mr. Lines to appear on October 4, web-based newsletter Inside Bermuda revealed this week.

This follows there having served four administrative subpoenas on Mr. Lines and the company in April, while he was passing through Miami International Airport.

The SEC?s request for information was said to relate to investigations into possible fraud, market manipulation and reporting violations by LOM in the trading of three US-listed companies: Sedona Software Solutions, SHEP Technologies and HiEnergy Technologies.

In court filings, the SEC has alleged that the Lines brothers and LOM customers profited by more than $6.4 million from securities fraud and market manipulation and that the firm caused false statements to be filed with the SEC and altered its internal records to impede an investigation.

In some cases, the alleged victims were LOM?s own clients, according to the SEC, which suspects that LOM?s partner in one alleged fraud was New York mafia associate Philip Gurian, described as a ?recidivist securities violator? and ?convicted felon?.

Because LOM and Mr. Lines have not complied with the SEC?s demands for information, the US District Court for the District of Columbia issued an order on August 17 ordering Mr. Lines, on behalf of himself and the company, to attend a hearing that is scheduled to start at 9.45 a.m. on October 4.

LOM and Mr. Lines must ?show cause? why they should not be ordered to produce documents and provide testimony pursuant to the subpoenas served on them earlier in the year.

If Mr. Lines and the company do not attend or fail to persuade US Magistrate Judge Alan Kay that the subpoenas are invalid, they will be ordered to comply with them or face contempt of court proceedings.

Inside Bermuda reported that targets of the SEC investigation include LOM, which has offices in Bermuda, the Bahamas and the Cayman Islands; Scott Lines; his brother and LOM President, Brian Lines; fellow Bermuda residents Kevin Way, Eric Collins, Michael Heels, and Richard King; Todd Peever and James Curtis, who are believed to reside in Vancouver, and offshore companies associated with the individuals, including those domiciled in Bermuda, Belize, and the Bahamas.

The court has ordered the SEC to serve LOM and Mr. Lines with the order to show cause by no later than the end of this week.

Mr. Lines and his company have until September 8 to deliver to the SEC ?any statement of points and authorities and other papers in opposition to the application?.

LOM has denied any wrongdoing and stated that it will fight legal action that has been brought by the SEC.