LOM has filed a motion to strike a US Securities and Exchange Commission report which LOM says contains ?unsupported, irrelevant and false factual allegations directed at the character of LOM and its officers.?

The SEC filed the status report with the US District Court for the District of Columbia just two days before Judge Richard Roberts denied LOM?s bid to stay an order enforcing four administrative subpoenas for information. The subpoenas that were served on managing director Scott Lines in 2004 relate to SEC probes of trading of Sedona Software Solutions Inc. and SHEP Technologies Inc. They require LOM and Mr. Lines to produce recordings of telephone conversations between Scott Lines and his brother and former LOM president Brian, recordings of conversations with their customers and clients as well as documents containing confidential information of third parties including recordings of interviews with LOM personal which the Bermuda Monetary Authority made as part of its own Sedona investigation.

The SEC, which filed the status report to underscore the urgency for Judge Roberts to hand down his ruling, outlined a number of allegations including LOM?s alleged destruction of telephone records.

The SEC also reported that chairman and president of LOM Donald Lines had ?flouted? three administrative subpoenas served on him while he visited the United States and that as part of its resolution with the BMA, ?LOM demanded that the terms of the resolution be kept confidential from the SEC, the investing public and, consequently the courts.?

LOM stated in its motion to strike that the SEC provided ?not a shred of evidentiary support for its defamatory accusations? in the report. LOM deemed the accusations ?baseless? and charged the SEC with failing to provide LOM with an evidentiary basis for its ?grave? charges.

LOM ?categorically denies? each allegation which it said it can demonstrate as ?fallacious, defamatory and highly damaging to its reputation? and accused the SEC of making the allegations expressly for the purposes of prompting the US District Court to rule on the case.

LOM said the SEC ?submitted no affidavit, declaration, or other evidence? in support of allegations that in April 2005 a member of LOM?s Audit Committee disclosed to LOM?s auditor that LOM had destroyed all tape recordings related to Sedona as well as other tape recordings.

In a declaration included with the motion, LOM?s compliance officer Scott Hill swore 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.

LOM said that the allegations repeated in the Bermuda press have done ?severe damage to the standing of LOM a reputable enterprise in its community.?

?Unless the SEC is able to proffer credible, non-hearsay evidence that LOM engaged in the destruction of evidence, this Court has an obligation to ensure that the judicial system is not manipulated in this fashion particularly by an agency of the US government,? LOM said.

The company is also demanding proof that the SEC served president and chairman Donald Lines while he was in the US in November.

Mr. Lines has sworn in an affidavit that he has ?no recollection of being served? with three administrative subpoenas nor does he recall ?receiving from any person, any documents relating to the production of documents by LOM or his appearance at the SEC.?

?In the face of Mr. Lines? declaration, the SEC?s smear on Mr. Lines? character should not be allowed to remain on the record,? the LOM motion said.

LOM also asked the court to correct the SEC?s accusation that LOM had demanded the Bermuda Monetary Authority keep the results of its resolution with LOM ?confidential from the SEC, the investing public, and consequently, this Court.?

Mr. Hill swears in his affidavit that while he was not present during the discussions between the attorneys for LOM and the BMA that led to the resolution: ?I am however informed that no demands were or could have been made on the BMA by LOM.?

?The SEC?s accusations - unsupported by any evidence - serve to malign the moral fibre and ethics of LOM and its officers during an administrative investigation.

?Indeed they would be defamatory in any other context,? the LOM motion said noting that courts ?regularly strike these types of unsupported attacks on a party?s character.?

Striking, is particularly warranted since the SEC?s ?unsupported and false statements? respond in no way to arguments or claims made by LOM, the motion said.

The SEC has previously told this newspaper that it stands by its report.

LOM asked the court to strike the report and produce an order stating that the filing was ?unfounded, inappropriate and improper?.

In the alternative, LOM asked the court to direct the SEC to provide evidentiary support for its allegations.