Lines Overseas Management moved yesterday to again challenge a US Securities and Exchange Commission assertion that LOM "demanded" that the terms of a settlement with the Bermuda Monetary Authority be kept confidential.

The settlement pertained to the BMA's investigation of LOM's role in the trading of Sedona Securities. That security is at the heart of an SEC probe into alleged market manipulation. For the past two years the SEC has been attempting to secure a court order to enforce subpoenas it served on LOM in order to obtain information relating to Sedona trades including materials from the BMA's investigations and settlement. The Bermuda Supreme Court recently placed an injunction on some of the information requested.

After the BMA completed its investigation in December last year, LOM told this newspaper that the BMA had "certain regulatory issues with the regulated LOM companies arising out of Sedona and related matters".

"Those issues have been resolved to the satisfaction of the BMA by LOM companies having made changes to their management and control arrangements and having given undertakings to the BMA to further enhance their compliance regime and their management structure," a spokesperson said earlier this year.

The company, which is traded on the Bermuda Stock Exchange, did not release further details on that settlement.

In a follow-up filing to the US District Court judge reviewing the subpoena enforcement order, the SEC accused LOM of demanding the Bermuda Monetary Authority keep the terms of its resolution regarding its own investigation of Sedona "confidential from the SEC, the investing public, and consequently, this Court".

LOM has made a motion to have the entire report in which the SEC made those comments struck from the record. It also wants the court to correct the SEC's assertion that LOM had demanded confidentiality. LOM chief compliance officer Scott Hill stated in an affidavit filed earlier this year that while he was not present during the discussions between the attorneys for LOM and the BMA that led to the resolution of the BMA's investigation of Sedona, "I am however informed and believe that no demands were or could have been made on the BMA by LOM. Any terms of the settlement of this matter were negotiated to the mutual satisfaction of all parties."

The SEC responded in a court document last week that "on several occasions senior members of the BMA informed the SEC that, as a condition of the BMA's settlement, LOM "demanded that the terms be kept confidential".

SEC assistant director in the Office of International Affairs Susan Yashar stated in a declaration that on December 2, 2005 that a senior officer of the BMA informed her that a settlement had been reached, however that officer said "he could not share the terms of the settlement with the SEC because of a confidentiality provision in the settlement agreement."

He also informed Ms Yashar that "LOM believed the BMA was too cooperative with the SEC and LOM requested the confidentiality provision during the settlement negotiations and would not have entered into the settlement without the confidentiality provision," she said. SEC senior counsel Alberto Arevalo declared that on January 10 this year, he, along with several others at the SEC participated in a telephone call with several senior officers from the BMA. They explained that since Bermuda law already imposes a duty of confidentiality on the BMA the BMA did not need to obtain a confidentiality provision for its settlement with LOM and also confirmed during that call that LOM was not subject to any duty of confidentiality under Bermuda law in respect to the terms of the LOM/BMA settlement, he said.

"BMA officials informed us however, that LOM was 'keen' to have a confidentiality provision as part of the settlement and that such a provision was required by LOM to reach a settlement to with the BMA," Mr. Arevalo said.

The BMA is precluded by law from discussing publicly specific actions in relation to any particular regulated entities and so it was unable to answer direct questions from this newspaper as to whether or not LOM had insisted on an additional confidentiality provision.

Responding to the SEC yesterday, LOM said in a court response, "While LOM does not dispute that it requested that the settlement agreement include a confidentiality provision, even without such a provision, Bermuda law precluded the BMA from sharing any information regarding the settlement with the SEC ? and the SEC admits as much."