Bermuda-based investment firm LOM (Holdings) Ltd., as well as brothers Scott Lines and Brian Lines, have agreed to settle with US financial regulator, the Securities and Exchange Commission (SEC), over a long-running fraud complaint.

The revelation, which signals a likely end to a dispute that has spanned almost eight years, came in an order filed last Friday by Judge Loretta Preska in the US District Court of the Southern District of New York.

While the proposed terms remain under wraps, LOM said yesterday that the agreement would "not impact LOM's business".

A spokesman for the company added the settlement would come as a relief to staff and clients and was expected to include no admission or denial of liability.

Counsel for the Lines brothers and the LOM entities named in the complaint "advised the court that they reached a tentative settlement, subject only to the final approval of SEC commissioners and counsel for the SEC", Judge Preska stated on Friday.

The news came less than three weeks before a trial was due to begin, with the SEC claiming that LOM, the Lines Brothers and other defendants participated in a "pump and dump" fraud, involving Renaissance Mining Corporation, Sedona Software Solutions Inc. and SHEP Technologies Inc.

In their own submissions in response to the SEC complaint, LOM and the Lines brothers have denied the fraud allegations and argued that all the cases involved legitimate business opportunities.

An LOM spokesman said yesterday: "LOM is very pleased that after almost eight years, the SEC staff has finally agreed to settle the pending civil litigation on reasonable and appropriate terms.

"The terms will not impact LOM's business, and we believe finally having resolution will be a relief for staff, customers and counterparties.

"The agreement is tentative at this point, but we expect it to be formally approved and entered into the court record in the next three weeks. We will be able to comment further on the settlement once it is final."

A trial on the matter had been slated to start on October 12. Judge Preska ordered the SEC's lawyers to advise the court by October 8 whether SEC commissioners had approved the settlement.

"With regard to the October 8 deadline, the SEC have indicated that they expect to have the formal approval of the commissioners by that date," the LOM spokesman said. "Following that, the approved settlement will be forwarded to the judge.

"Our lawyers expect that the judge will sign off and finalise the agreement within about a week, at which time the pending litigation will be considered closed, resolved on consent without an adjudication and without admission or denial of liability.

"We can advise at this time, that as a result of the tentatively agreed settlement terms with the LOM subsidiary companies, upon final approval LOM (Holdings) Ltd. - the public, parent company - will be dismissed entirely from the proceedings."

Scott Lines is the president of LOM and Brian Lines the former president. Other SEC defendants in the action are LOM (Holdings) Limited, Lines Overseas Management Ltd., LOM Capital Ltd., and LOM Securities (Bermuda) Ltd., which are all domiciled in Bermuda, as well as LOM Securities (Bahamas) Ltd. and LOM Securities (Cayman) Ltd.

Judge Preska said last Friday that other two defendants in the action, Wayne Wew and Anthony Wile, have also reached tentative settlements with the SEC.

The court had previously entered judgments resolving the SEC's claims against former co-defendants Robert Chapman, Todd Peever and James Curtis. Determinations of disgorgement from them are still outstanding.

In its pretrial documentation, the SEC argued that with regard to Sedona and SHEP the Lines brothers and associates' trading yielded approximately $2.05 million in combined "illegal proceeds".

In their pretrial documents, LOM argued that its evidence would show there was no stock manipulation and no misleading of investors.

The OffshoreAlert website was reporting yesterday that the trial the defendants had requested that the estimated 15-day trial, planned before the settlement announcement, should be heard by a jury, rather than a judge.

It added that the evidence from the Lines brothers and various LOM staff and former staff was due to be given in the form of videotaped depositions.