Lines Overseas Management has moved to counter Canadian news reports about its activities in Canada.

The action follows media reports about a British Columbia Securities Commission panel order for LOM to show cause ?why it would not be in the public interest for the Commission to order that LOM cease trading securities in British Columbia until it provides all dealers in British Columbia having accounts for LOM the appropriate know-your-client information about those having financial interest in those accounts.?

The BCSC panel made the order after dismissing a BCSC staff application to impose sanctions against LOM and some of its executives for alleged failure to comply with staff demands for information about trades of San Telmo industry that were conducted through Canadian brokerage houses.

Account opening forms presented into evidence in the BCSC staff?s investigation of trading of shares of San Telmo Energy ?appear to show that at least some of this trading is being done by LOM on behalf of undisclosed beneficial owners,? according to the panel.

Which, the panel said would mean ?trading is being carried on without the dealers involved requiring or possessing the appropriate ?know your client? information.?

The panel said it could not turn a blind eye the issue and ordered all parties to make submissions on the issue before the end of the month.

Canadian media, including that national wire service Canadian Press and the national newspaper The Globe and Mail, picked up the story. CP led its story ? which is circulated to media outlets around the country ? ?A group of offshore companies has traded $1.2 billion worth of stocks in Canada during the past year without certainty about who is behind the transactions?.

The Globe and Mail reported: ?A Bermuda brokerage firm active in Canada and accused of providing a ?cloak of secrecy? to its clients is under investigation by Canadian and US regulators over its role in a series of alleged stock market manipulations.?

LOM issued clarifications ?following misleading inferences in some of the recent Press reports.?

In an e-mailed statement, LOM said that it in order to trade Canadian securities, it maintains a number of accounts with well known broker-dealers in B.C. and Ontario.

?LOM?s counter parties are fully aware of LOM?s status as a brokerage, and it is properly disclosed as such on their forms. This is the same way any non-Canadian investment firm would operate, whether it be a well known US firm without a Canadian subsidiary, or LOM in Bermuda.

?To say, as has been reported in several recent articles, that LOM ?may be acting as a front for undisclosed investors? is entirely misleading, and makes a completely legitimate relationship sound sinister and improper.?

LOM said that if the BCSC review finds that the brokerage firms it regulates must obtain beneficial ownership information on underlying customers of foreign brokerages, ?then the BC brokerage firms will have to change its own policies and LOM will have to abide if it wants to continue to have accounts with BC firms. But it is not correct to imply that past accounts were being operated improperly.?

The Globe and Mail reported: ?The LOM case raises the thorny problem of offshore brokerages located in secrecy havens that use established firms to do their transactions. Confidentiality is at the heart of offshore trading. Once an account is opened, it can be used by hundreds of individuals whose identities are known only to the offshore brokerages officers.?

LOM responded in its e-mailed statement: ?Ultimate beneficial ownership details of individuals trading via firms outside of Canada is available, through the established mechanism of regulator-to-regulator requests, and that the BCSC successfully used this route in the enquiry which prompted the recent hearing.?

LOM?s activity in the Canadian markets, representing 40 percent of its overall business, saw over 10,000 trades during the past year totalling more than 800 million shares at a market value exceeding $1.2 billion.

The Canadian deadline is not the only one looming for the 12-year-old brokerage and investment services provider.

A US District Court has given LOM until February 14 to respond to four subpoenas for information from the United States Securities and Exchange Commission. LOM plans to appeal this order which is at the heart of an SEC investigation of alleged stock manipulation of two tiny Vancouver-based companies, Sedona Software Solutions Inc. and SHEP Technologies.