LOM Holdings Limited almost quadrupled its half year earnings over the first six months of 2005 as a result of increases in asset management and foreign exchange areas. However a legal battle with a US regulator continues to impact the Bermuda-based company.

LOM posted earnings last night of $1.1 million, a 432 percent improvement on $251,139 posted in the first half of the year 2005.

However LOM president Scott Lines said in the company?s earnings release that continuing US Securities and Exchange Commission investigation has made it very difficult for the Group to raise substantial new business.

For more than two years, LOM has been engaged in a court battle with the SEC over the enforcement of administrative subpoenas for information related to trading of bulletin board listed securities SHEP Technologies Inc. and Sedona Software Solutions Inc.

While the company continues to contain costs, its efforts have been hampered by professional fees which rose a further 18 percent to reach $1.3 million in the first half of the year.

The bulk of the amount is legal fees which reached $956,259, a 20 percent increase over the same period last year.

LOM has has however made progress in controlling costs in other areas. Overall operating expenses fell 11 percent year-on-year, according to the company?s earnings report.

The group also had success in attracting new funds under management with asset management revenues rising 22 percent on the 2005 half year. Foreign exchange revenues increased 234 percent as the Group?s subsidiaries benefited from a decline in the US dollar.

Broking revenues fell 6.9 percent to 62 percent of revenues while interest earnings fell by 2.4 percent as a reduction in margin loans was in part mitigated by higher interest rates.

Leasing revenues declined 40 percent after LOM placed its leasing book into run-off. The leasing business should be totally wound down by mid-2007, Mr Lines said.

LOM?s assets under administration rose 19 percent year-on-year to total $1 billion as of June 30, 2006.

?LOM remains in a strong financial position with net equity of almost $20 million and no debt,? Mr Lines said.

LOM holds cash and equivalents of $9.4 million representing 47 percent of total equity. As of June 30, 2006, LOM?s book value was $3.12 per share.