Bermuda-based broker and investment firm LOM (Holdings) Ltd. announced yesterday that it made a loss of almost $440,000 in 2009 after a recovery in the second half of the year.

In a letter to shareholders, LOM chief executive officer Scott Lines said the company made a $285,000 profit over the third and fourth quarters which partially offset the $725,000 first-half loss.

Mr. Lines said the ongoing legal battle with US financial regulator the US Securities and Exchange Commission, which has accused the company of securities fraud in a civil case, was continuing to be "a major drain on the firm".

He added that the case was "a matter which we continue to contest vigorously and now expect will be concluded in this financial year".

LOM's assets under administration rose 24 percent to $796 million last year, while revenues fell nine percent to $8 million.

The net loss of $439,775, or seven cents per share, compared to a loss of $765,514 in 2008.

In his letter, Mr. Lines said LOM's brokerage revenues almost ceased in a first quarter during which major stock markets bottomed, as the S&P 500 fell 25 percent.

"However, from that nadir the balance of the year has witnessed a sustained recovery in financial markets," Mr. Lines added. "The unprecedented fiscal and monetary stimulus enacted around the world in late 2008 and early 2009 first stabilised economic activity and then led to a gradual resumption of economic growth in the western world.

"In Asia, the very aggressive stimulus in China combined with healthy personal balance sheets has resulted in much stronger growth than the West."

The second half of the year brought "a continual improvement in business activity", which, along with an 11.5 percent reduction in operating costs, helped the firm to return to profitability in the second half.

Mr. Lines said the group's balance sheet remained strong at year end with no debt and 20 percent of total assets is cash.

At the end of 2009, LOM's book value per share was $3.01, while the share price on the Bermuda Stock Exchange traded between a low of $3.35 and a high of $4.00.

As the business stabilised last year, the board began paying a dividend of one cent per share.

Mr. Lines added that LOM was investing in technology to grow its business and provide higher value-added services to its clients.