UNITED STATES DISTRICT SOUTHERN DISTRICT EXCHANGE COMMISSION LOM HOL - PDF document

1 UNITED STATES DISTRICT SOUTHERN DISTRICT
UNITED STATES DISTRICT SOUTHERN DISTRICT EXCHANGE COMMISSION, LOM (HOLDINGS) OVERSEAS MANAGEMENT LOM SECURITIES (BERMUDA) LTD.; LOM SECURITIES LOM SECURITIES (BAHAMAS) LTD.; TODD PEEVER; PHILLIP JAMES Plaintiff Securities Commission (the action concerns two separate, but similar, companies, Sedona Software Solutions, SHEP Technologies, and SHEP shares were the Over-the-counter The schemes took 2003, and involved substantial participation a Bermuda-base

2 d managing principals, defendants sever
d managing principals, defendants several of Overseas Management LOM Capital LOM Securities (Bahamas) referenced herein or the Sedona and SHEP fraudulent acquisition of nominees to beneficial ownership over Sedona touters to SHEP stock, significant trading through defendants Brian Lines the Sedona trading yielded approximately million in illegal Lines brothers customers, defendants million in illegal the Sedona defendant Anthony a Canadian stock issue

3 d deceptive other promotional 2003 to th
d deceptive other promotional 2003 to the misleading impression that newly-formed private company, Renaissance Mining Corporation, Inc. American gold mines and was a leading gold producer. At the same part of the defendants Brian Lines had acquired over ninety-nine percent outstanding shares through offshore nominees order to the publicly-traded Sedona shell with Renaissance. Defendants Brian million for Renaissance through a private placement stock th

4 rough Ryan Leeds LOM Ltd. dealer throug
rough Ryan Leeds LOM Ltd. dealer through which Lines, and into the the existence red flags, Leeds failed determine whether the Lines brothers were illegal distribution Sedona stock. The Sedona collapsed on January SHEP scheme, early 2002, Lines, Scott Lines, and along with defendants Peever and Curtis, collaborated obtain control Inside Holdings Inc. the use nominees. The scheme involved merging with a private paying touters to promote the new later s

5 elling their the ensuing Unlike the sche
elling their the ensuing Unlike the scheme came nearly complete Throughout the 2003, defendants Peever, Curtis, Brian Lines, and Scott Lines over three million shares into the touters, generating approximately $4.3 million illegal proceeds. These registration statement effect, and no valid exemptions Defendants Peever, Curtis, Brian Lines, Scott Lines report their Commission filings, as they to do, and Brian Lines and misleading be filed attempt to Pee

6 ver, Curtis, Brian Lines, Scott Lines C
ver, Curtis, Brian Lines, Scott Lines Court properly action pursuant to of the Act and and U.S.C. $5 77v(a) and 78aal because certain of the conduct at issue occurred in the Southern District of New York. THE PARTIES 17. The plaintiff is the Securities and Exchange Commission, which brings this civil action pursuant to authority conferred on it by the Exchange Exchange U.S.C. $5 77t@) and 78u(d)(l)]. 18. Defendant Brian N. Lines, age 45, a citizen the

7 overseas territory of the United was th
overseas territory of the United was the subsidiaries until his a citizen and resident of the United Kingdom. Scott Lines executive officer of Holdings and relevant period, he held defendant subsidiaries. testimony before the Scott Lines against self-incrimination all substantive services companies defendants Brian and Scott Lines and father, Donald Lines. Lines, Donald Lines, the Lines Stock Exchange. subsidiaries are collectively referred The follow

8 ing defendants investment banking close
ing defendants investment banking closely followed by combined entity's reverse takeover of company. As part of negotiations with Renaissance needed to raise at acquire an ownership partner met discuss financing for and review strategies for entity public. investment banking subsidiary, Renaissance's investment banker million through private offering of Renaissance shares (the thus enabling Renaissance Renaissance signed intent to for $5 closing, the

9 convertible debenture (with interest twe
convertible debenture (with interest twenty-five percent per year), and Renaissance's assumption of approximately $9 million of going public, the of intent required have become publicly-traded company the time acquire control of Renaissance's within six months and would the public shell's Brian and Scott Lines Secretly Acquired the Sedona Shortly after meeting in late and, upon Sedona as a suitable negotiated an agreement with Sedona's chairman executi

10 ve officer (the million shares of Sedon
ve officer (the million shares of Sedona stock without a share purchase agreement. Similarly, there was no purchase to the four million shares owned the Sedona CEO The five by the execute purchase agreements for Sedona shares were Gateway Research Management Iguana Investments ICH Investments an entity earlier, Brian Scott Lines execute share purchase agreements other documents various nominee Nominees used in the Sedona exchange for approximately USD

11 Pursuant to arrangements with signature
Pursuant to arrangements with signature directors were responsible for so by or the Lines brothers. They did not pay for or Sedona shares purportedly acquired these entities. Rather, their role execute documents apparently shield Brian and such as Curtis, who also secretly acquire fee for transactions to hide Subsequent Events transaction to acquire the approximately million Sedona shares for approximately $0.07 of the closing, on about January Sedona

12 CEO personally share certificates repre
CEO personally share certificates representing million Sedona shares Seven Shareholders brothers7 attorneys be held the law payment had been received brothers. The one share certificate 245,000 shares Seven Shareholders, it to the block of associated purchase agreement, Ltd. received Certificate 245,000 Sedona shares, which the directly to 50. On the other side of transaction, on or about January ICH account at make several payments price, including

13 payments to benefit of $15,000 check mar
payments to benefit of $15,000 check market maker, and $40,000 wire transfer to account maintained a retail York, New York 10005. or about the Sedona arranged for the his sons be delivered the attention of Brian Lines these four million shares. These share certificates, which bore restricted legends, were never deposited after Tony had begun prime the market by disseminating deceptive information merger with Sedona below), Brian Lines directed Manhatt

14 an offices, a fax to Mellon7s instructio
an offices, a fax to Mellon7s instructions to, transfer agent with these instructions on or these shares Their Beneficial 56. Sections Exchange Act Rules 13d-1 13d-1 U.S.C. 5 78m(d); 17 C.F.R. 5 240.13d-1 and 240.13d-21 require any person that has indirectly, beneficial ownership a statement than ten days more than percent accumulation, the Schedule 13D must any material change in the facts set forth in the Schedule 13D (including the beneficial owners

15 hip amount equal of the to ensure that t
hip amount equal of the to ensure that the public material changes more than five a publicly-traded individual, entity, related group. Exchange Act any person who officer, director, beneficial owner of more than ten percent security to file a statement with 16a-3 [17 that Section a Form for initial statements 4 for statements beneficial ownership. is to ensure that the public any acquisition a stock position a publicly-traded security by officer, direc

16 tor, Sedona's outstanding file, within
tor, Sedona's outstanding file, within Sedona, beneficial ownership reports with the Commission, specifically, original Schedule 13D and Form Lines failed such reports. a public company stock registered with to file current report with the Commission disclosing majority control, do so. control persons Sedona, Brian Scott Lines should have make such a filing, but failed to Tony Wile Renaissance Unlawfully Sedona Stock through January 2003, Renaissance,

17 and others, several purportedly mining
and others, several purportedly mining stock analysts, engaged a concerted effort anticipated merger with a public Renaissance assembled extensive promotional apparatus to misleading information the false impression that Renaissance Central American gold was the "Leading Gold entity known International Mining Group January 2003, relations" firm, to distribute writers, mining-related prospective investors, Renaissance issued a press "Renaissance Acquir

18 es Producing Assets "meteoric rise" the
es Producing Assets "meteoric rise" the mining properties Lines was in early January 2003 that Wile coordinating a substantial effort, along time in Wile sent Brian Lines an a draft the January Press Release the start of a massive promotion. Visit a my team. and have guys working the phones Bob Chapman's son runs the being stoked stoked and I are also closing a acquire a brokerage . . . that will focus . . . The circle is almost complete. bad you for

19 the night of of lo&. We have over people
the night of of lo&. We have over people coming an unbelievable private Renaissance Press Release Announcing Renaissance's Reverse 72. At the time Renaissance were the false statements described 60 through 71, above, Renaissance, with series of transactions whereby would: (i) acquire the three Central American gold already publicly (ii) raise million in a purportedly private offering (the mines; and merge with publicly-traded Sedona shell Lines brother

20 s to take the newly-formed mining compan
s to take the newly-formed mining company public. effect those transactions, Renaissance misled public investors believing that they could invest Central American gold stock on the even though Renaissance had not merged with Sedona Renaissance issued a signed a Sedona (the was to issued and outstanding and change Renaissance Mining Holding Corporation. 74. The January Press Release other gold websites, and broadcast e-mails potential investors. releas

21 e also referred to the deceptive January
e also referred to the deceptive January Press Release purported Central American mining acquisitions. The January Press Release falsely that all of resigned and Wile (as chairman) president (as president and chief executive Press Release also identified defendant Renaissance's investment banker and highlighted its role of the $6 million Offering without disclosing fact that principals, defendants Brian Lines, had acquired and controlled more than nine

22 ty-nine percent of Sedona's disclose the
ty-nine percent of Sedona's disclose the Lines brothers' controlling interest release created independent investment banking the merits of the agreed to serve as 17 Press were aware that LOM-related parties already acquired nearly all of Sedona's outstanding shares weeks Capital, Brian 17 Press one of Sedona's controlling shareholders, Brian Lines was reckless knowing, that the January Press Release material information Scott Lines's ownership of Sedo

23 na. Capital, Brian Lines, and Scott Line
na. Capital, Brian Lines, and Scott Lines that: (i) the proposed merger between (ii) Renaissance were not U.S. markets (under the SSSI or gold mines, and reactivate Renaissance was publicly claiming that it already midnight, Sedona issued a press release dissemination service, announcing This press release substantially identical 17 Press Sedona's Business had planned an unregistered, offering pursuant pursuant C.F.R. $5 230.501 - 230.5081, which provi

24 des an exemption registration under the
des an exemption registration under the exemption, the must, among other satisfy the the C.F.R. $ 230.502(c)], which prohibits offers or sales by means of "any form of general general advertising, not limited limited advertisement, article, notice or any newspaper, magazine, or similar media over 300,000 stock that at $0.25 On Monday, were closed for the holiday, Wile sent a broadcast e-mail hundreds of recipients including, upon information falsely s

25 tated that that no longer a private comp
tated that that no longer a private company,'' was available for purchase on the the ticker symbol SSSI, and and publicly traded shares purchased SSSI will once the name have taken copy of Chapman's January and stated, a Special Bulletin that was issued one of the leading independent mining many analysts Renaissance." Wile did in his had purchased over share, nor did he disclose Sedona shell about January received Wile's deceptive January 20 that same

26 Brian Lines forwarded Touter A's mislead
Brian Lines forwarded Touter A's misleading reports on Renaissance were respective subscribers republished within days on mining websites. the morning almost immediately after release announcing merger with Renaissance, Wile attaching copies reports on Renaissance newsletter writers five days before Sedona's stock began trading, Lines told stock price share, and used induce the to buy shares in the Offering at the market opened, Scott Lines told sever

27 al additional that Sedona's open at to $
al additional that Sedona's open at to $8 per again used to sell Renaissance shares per share. Sedona's fact, manipulated, paragraphs 106 $8 per share later that customers that shares were trading that no merger between Renaissance had occurred. Scott his solicitations customers that Brian Lines the Sedona that was trading on January 2 his solicitation calls before January Lines also customers that Renaissance already acquired the Central American and

28 that the mines currently producing. exam
that the mines currently producing. example, on January Scott Lines told customer that Renaissance had already the Central American mines, was "going produce 100,000 was "going $16 million million in cash flow," and $7 to area." Based on Scott Lines's pitch, the customer agreed the Offering. fact, Scott Lines was reckless not knowing, that Renaissance not acquired fact needed the Offering soliciting in the acquisition bring them production. Scott Lines

29 knowingly recklessly failed to during t
knowingly recklessly failed to during that call that the Sedona shell, conducted reasonable due diligence concerning 103. Customers solicited Lines agreed Renaissance shares. During a January interview with staff, Scott Lines Offering already was fully subscribed, only two days after Capital's customers apparently agreed to Offering, generating of approximately $284,000. customers that Scott solicited resided in the business when Scott called to him

30 Renaissance Offering shares. The custome
Renaissance Offering shares. The customer had maintained account at for several customer that would open per share, that Renaissance would produce 150,000 ounces 2003. Based on Scott Lines's solicitation, customer agreed Renaissance's Offering. following January many of the prospective agents solicited, and who received Renaissance's submitted executed subscription agreements transferred funds payment for the Lines Brothers Manipulated Stock Price Woul

31 d Approach defendants Tony and Wayne Wil
d Approach defendants Tony and Wayne Wile, along with defendants Lines, orchestrated At 8: controlled by Brian and Scott Lines placed one of the broker-dealers where maintained accounts determine whether and the Lines brothers distribution of Sedona securities. Despite the existence of several a large Sedona securities sell, that for seven months, and that, prior pennies per share, but was being offered for sale on that per share reasonable inquiry, o

32 r any due of the Sedona shares offered a
r any due of the Sedona shares offered and them on behalf LOM Ltd. and the Lines brothers. Leeds whether a statement was whether the Lines brothers underwriters engaged in an distribution of Sedona securities when he and sold about January Scott Lines spoke telephone with Sedona stock. During that call, which occurred in the late Lines told out there and and stock]." Upon information Scott Lines during that was defendant Ryan used other sell Sedona on

33 behalf of the 125. LOM's communicated ex
behalf of the 125. LOM's communicated extensively other brokerage firms in the U.S. regarding with U.S. brokerage those firms telephonically or electronically over integrated trading message system operated Bloomberg Finance Ltd. transmitted the brothers' Sedona sell and other broker-dealers between January Bermuda and determine whether the Lines brothers were illegal distribution or about Brian and Scott Lines privately sold 100,000 Sedona ICH accoun

34 t customers and employees, the signature
t customers and employees, the signature nominees used Sedona acquisition. At that time, Sedona shares were publicly trading per share. Even though Brian and Scott Lines had shares for per share, the Sedona shares for about $0.07 approximately $393,000 these sales During the following of those LOM-related purchasers sold these shares over the sold these Sedona shares on behalf customers and employees Commission suspended stock because of questions conc

35 erning public information about Sedona S
erning public information about Sedona Scott Lines was aware of Brian Lines's sales of Sedona stock over the During two different telephone calls following the Commission's suspension trading in Sedona's stock, Lines stated the investors were "laid the suspension because stock that been selling shares on January were not credited about February 5,2003. The the Lines Largo-Bahamas accounts were remove evidence that had received certain Sedona shares. t

36 he direction of the private sale of the
he direction of the private sale of the Lines brothers' customers, including certain signature directors, except for the already sold over addition, on Lines sent mailing address that letter, Lines stated that underwrite Renaissance's Offering because was not Capital." This remarkable letter was sent Capital's customers, solicited by and others, the Offering Played a Significant the Sedona The Lines brothers' control manipulative scheme. their respecti

37 ve two most Entities during the relevant
ve two most Entities during the relevant period, Brian were able direct the at each step of the Scott Lines directed to: (i) controlled nominees sign the Sedona transfer funds into Lines brothers' ICH account wire funds that account pay for shell; (iii) credit the Sedona stock certificates the Sedona CEO the Seven Shareholders to the ICH and accounts controlled Brian and maintained at Bahamas, respectively; deliver Sedona that they could be Sedona sto

38 ck $4 per (vii) reallocate the Sedona th
ck $4 per (vii) reallocate the Sedona the ICH Largo-Bahamas accounts brokerage accounts the Commission began Brian and Scott beneficial ownership. 140. Brian Scott Lines also brokerage accounts sell their Sedona stock through at LOM Lines were Scott Lines also acted on behalf capacities as and Managing Capital permitted Renaissance role as investment banker without disclosing Brian ownership of the Sedona Lines brothers also their capacities the privat

39 e benefited, or stood from the Sedona fr
e benefited, or stood from the Sedona fraud, through commissions the purchase Sedona stock, and the seven percent investment banking for the Renaissance Offering. all relevant times throughout Sedona scheme, Brian and persons of control person FRAUDULENT SCHEME prior to their participation the Sedona manipulation, Brian with two defendants Peever Curtis, together participated manipulative scheme public shell with a paying touters to promote the stock,

40 and then profiting selling millions of
and then profiting selling millions of shares into the ensuing demand. and Curtis's Secret Acquisition On January Brian Lines acting representative, Peever Curtis secretly acquired over eighty-three percent Inside Holdings, a Canadian public company whose securities were registered with a group and directors. agreement designated Lines specifically, As with Brian Lines LOM-controlled nominee companies signature directors to execute the purchase shares

41 . While controlled nominees appeared wer
. While controlled nominees appeared were the actual beneficial of these The six nominee companies that executed purchase agreement later used in the transaction, along Consensus Investments Nottinghill Resources Aberdeen Holdings and Curtis each paid half of the approximately nominees and signature directors any funds did they beneficially own these delivered approximately and LOM instructed that two different Accumulator Ltd. 151. The Golden account

42 was beneficially by Peever, and Curtis.
was beneficially by Peever, and Curtis. The account subsequently Cayman to Lines were the co-brokers for the Golden and Brian Lines Ltd. employee and Nomad accounts $500 the use the nominees (Warwick, Consensus, and Aberdeen) share purchase early February after crediting Curtis's Golden and Lines, arranged three million the approximately in the of stock the Canadian counterpart could later be traded brokerage firms. 154. Peever Curtis were required th

43 rough 188, below. 155. As of the scheme
rough 188, below. 155. As of the scheme, LOM Peever and Curtis's unwittingly filed several materially false that certain nominees that stock were entities, and that power to control acquired control were acting collectively early 2002, SHEP private company property, wanted to acquire with SHEP Ltd. the chief combined MUSHEP through Brian attorney. Peever told the SHEP CEO a shell appropriate business to merge into the shell. 157. Peever Curtis held th

44 emselves out as third-party between SHEP
emselves out as third-party between SHEP nominees that fact, Peever themselves controlled the into a CEO that LOM and shareholders were entity use the services certain newsletter writers following the CEO agreed condition that that time, the SHEP CEO believed that the a similar disclaimer publisher had received coverage "directly "directly and "100,000 substantially paid they failed disclosed that had paid for the touts to sell SHEP stock by the Peeve

45 r, Curtis, and Lines brothers knew, or w
r, Curtis, and Lines brothers knew, or were reckless not knowing, these touts did not disclose that were being SHEP stock that the defendants, who had paid sell their ensuing demand. began disseminating prospective investors on February through February Lines and a series phone conversations during effect that was having on their ability sell their shares into the one call, Peever indicated that "ton of of the was angry that naked short sellers had dri

46 ven the stock price selling their shares
ven the stock price selling their shares into volume increase expected following the tout. 175. Below a call Jesus Christ. haven't sold a don't know what is that? We must be. You know, 280,000 shares or 290. SLines: Yeah, they must be shorting Peever: They've shorting into just do a primer? just did a just did did Journal's publisher] just started the off on the European stuff because the was down five percent Peever: Because you know, [the shorts] ca

47 me basically sharks swimming with you kn
me basically sharks swimming with you know.. Peever: Just following following Journaa around, so I mean, we've got tons more on the go, so alright. Let's under wraps guess and then they get today, you more buying and you know, Wednesday, Thursday or Friday, they'll start up because they don't want short at the end of the want you guys to too, right, but got to do some kind on this absolutely, but selling out the house that's up for for 177. The followi

48 ng day, February 26, Peever called Scott
ng day, February 26, Peever called Scott Lines told him those shorts a short sellers a couple February through the period when the touts being publicly disseminated, Peever, Curtis, the Lines brothers sold nearly three million SHEP shares through the yielding illegal over $4.3 million. All offers and were made without statement in effect, and Peever, Curtis, Lines brothers' approximately three million were made mostly through the broker account, execut

49 ed these trades LOM Ltd. and the Lines b
ed these trades LOM Ltd. and the Lines brothers. 180. Leeds not conduct or any due origin and ownership of initial sales should have alerted Leeds to those shares September 9 sold 165,000 SHEP, respectively, amounts equaled thirty-three thirty-nine percent the total volume SHEP traded 10, and should have the source of the With respect to Leeds7s through June no attempt whether he was selling on behalf an underwriter, or was otherwise engaged illegal d

50 istribution securities. Leeds also made
istribution securities. Leeds also made no, attempt whether a statement was SHEP shares. also sold on behalf of Peever, Curtis, Lines brothers through Markets, Inc. located at Hanover Square, New York, New account. Brian Scott Lines direct transactions were signatories to Paragon account opening documentation. December 2002 through April Peever and Curtis that they held at Curtis also transferred approximately SHEP shares certain individuals sold those

51 over the other brokerage Cayman, and Lt
over the other brokerage Cayman, and Ltd. transmitted accounts controlled by Peever, Curtis, and other U.S. broker-dealers between September 2002 and LOM Ltd. failed to conduct the Exchange Act Act U.S.C. 5 78j(b); 17 C.F.R. 5 240.10b-51 [Scheme to Defi-aud - Renaissancelsedona] [Brian Lines, Scott Lines, LOM Ltd., LOM Capital, LOM Bermuda, LOM Bahamas, LOM Cayman] 208. Paragraphs 1 through are hereby realleged a consequence the Sedona scheme, Anthon

52 y Wile others violated Section [15 U.S.C
y Wile others violated Section [15 U.S.C. U.S.C. U.S.C. 5 78t(e)] provides that a person knowingly provides substantial assistance in violation of or regulation issued under shall be to be in violation of such same extent as whom such assistance Defendants Brian LOM Cayman, conduct described above, provided substantial assistance abetted, Anthony of the Exchange Act Act 15 U.S.C. 5 78j(b); 17 C.F.R. 5 240.10b-51. .. 2 12. Unless restrained enjoined, de

53 fendants Brian Lines, LOM Ltd., will con
fendants Brian Lines, LOM Ltd., will continue violations of Section of the Violations of the Securities Securities U.S.C. tj 77e] [Offering and Selling Renaissance Securities without Registration Registration Lines, Scott Lines, 197 are hereby realleged and incorporated Defendants Brian Lines, Capital, and Anthony without a registration to such use of the mails to sell use or any prospectus to be carried through the mails any means or instruments tran

54 sportation, securities for the of sale D
sportation, securities for the of sale Defendants Brian indirectly, made of transportation in interstate of any registration statement having been filed to those By reason of the foregoing, defendants Brian Lines, Scott Capital, and directly or indirectly, violated, and enjoined will continue violate, Section and Rule 13d- 13d-2 Thereunder Thereunder U.S.C. 5 78m(d); 17 C.F.R. 5 240.13d-11 [Beneficial Ownership Ownership Lines, Scott Lines] 221. Parag

55 raphs 1 through realleged and incorporat
raphs 1 through realleged and incorporated the Exchange Exchange U.S.C. 5 78m(d); 17 C.F.R. 5240.13d- 1 and person that indirectly, beneficial security to file a statement Schedule 13D later than ten days more than percent accumulation, to disclose material change Schedule 13D (including beneficial ownership of securities one percent conduct described above Sedona, defendants Brian Lines Lines violated, unless restrained Exchange Act Rule 13d-1 13d-1 U

56 .S.C. 5 78m(d); 17 C.F.R. fj EIGHTH CLAI
.S.C. 5 78m(d); 17 C.F.R. fj EIGHTH CLAIM FOR RELIEF VioIations of Section 16(a) of the Exchange Act 16a-3 Thereunder Thereunder U.S.C. 5 78p(a); 17 C.F.R. 5240.16a-31 , [Beneficial Ownership Reports Reports Lines, Scott Lines] 224. Paragraphs 1 through of the [15 U.S.C. person who beneficial owner more than ten percent class of registered equity security to file employed devices, schemes, artifices to omitted to to make the in the light of the under

57 which they were business which operated
which they were business which operated foregoing, defendants Brian Lines, Scott Lines, LOM Curtis directly indirectly, violated, restrained and enjoined of the Exchange Act promulgated thereunder thereunder U.S.C. § 78j(b); 17 C.F.R. S240.10b-51. 238. LOM also liable for the foregoing LOM Ltd., Bahamas, LOM LOM U.S.C. 5 78t(a)]. TWELFTH CLAIM FOR RELIEF of Section Securities Act [15 U.S.C. U.S.C. to Defraud - MVSHEP] [Brian Lines, Peever, Curtis] 197

58 are hereby Defendants Brian Lines, LOM
are hereby Defendants Brian Lines, LOM Ltd., LOM LOM Cayman, in the conduct described above, the use sale of employed devices, schemes, or artifices obtained money any untrue statement a material fact omission to state fact necessary order to make of the circumstances under which they were transactions, practices, which operated deceit upon of the foregoing, defendants Brian Lines, Lines, LOM Ltd., LOM indirectly, violated, and unless restrained enjo

59 ined will the Securities Securities U.S.
ined will the Securities Securities U.S.C. tj 77q(a)]. THIRTEENTH CLAIM FOR RELIEF Aiding and Abetting Violations of Section 10(b) of the Exchange Act and Rule lob-5 lob-5 to Defiaud - IHI/SHEP] [Brian Lines, Scott Lines, LOM Ltd., LOM Bermuda, LOM Bahamas, LOM Cayman] 242. Paragraphs 1 through 197 are hereby and incorporated As a consequence the SHEP violated Section Section U.S.C. 5 78j(b); 17 C.F.R. tj 240.10b-51. 244. Section 20(e) of the Exchange

60 Act [15 a person who knowingly provides
Act [15 a person who knowingly provides substantial assistance to another person of the rule or regulation issued under provision to same extent the person to such assistance Defendants Brian Lines, Lines, LOM LOM Bahamas, conduct described above, knowingly provided substantial to, and aided and abetted, Peever of any securities, without a registration statement the foregoing, defendants Brian Lines, Peever, Curtis, and or indirectly, the Exchange Act

61 and 13d-2 13d-2 U.S.C. 5 78m(d); 17 C.F
and 13d-2 13d-2 U.S.C. 5 78m(d); 17 C.F.R. $5 240.13d-1 and 240.13d-21 [Beneficial Ownership Reports [Peever, Curtis, Brian Lines, Scott hereby realleged incorporated by reference. of the Exchange Act and Rules 13d-1 13d-1 U.S.C. 5 78m(d); 17 C.F.R. 5 240.13d-1 and 240.13d-21 require any indirectly, beneficial ownership a class file a statement on a Schedule 13D with the Commission than ten percent accumulation, and such be promptly to disclose materi

62 al change the facts set beneficial owner
al change the facts set beneficial ownership amount equal to one percent or more the conduct described above with respect Curtis, Brian Lines, and Scott Lines unless restrained violate, Section Act and and 13d-2 [15 U.S.C. and Abetting 13d-2 Thereunder [Beneficial Ownership Ownership Lines, LOM Ltd.] Paragraphs 1 through are hereby realleged and incorporated 255. As detailed Curtis violated Section Exchange Act Rules 13d-1 13d-1 U.S.C. tj 78m(d); 17 C

63 .F.R. $$240.13d-1 and 240.1 3d-21. 256.
.F.R. $$240.13d-1 and 240.1 3d-21. 256. Section 20(e) of the Exchange Act Act U.S.C. 78t(e)] provides that a person who knowingly provides substantial assistance to another person rule or regulation issued under of such same extent as the whom such assistance Defendants Brian and LOM in the conduct described knowingly provided substantial aided and abetted, Peever Exchange Act 13d-1 and 13d-2 thereunder [15 U.S.C. Unless restrained enjoined, defendants

64 Brian Lines and LOM Ltd. and abet viola
Brian Lines and LOM Ltd. and abet violations Exchange Act and 13d-1 and 13d-2 thereunder Plaintiff Securities and Exchange Commission enter final Enjoining Brian Lines and servants, employees all persons participation with him, and 13d-2 thereunder thereunder U.S.C. $5 78j(b) and 78m(d); 17 C.F.R. $5 240.10b-5,240.13d-1, and 240.13d-21; v. Enjoining LOM Capital and its officers, agents, servants, employees participation with it, and each violating, d

65 irectly indirectly, Sections 5 and the S
irectly indirectly, Sections 5 and the Securities [15 U.S.C. and from Exchange Act officers, agents, servants, employees and all persons in active or participation and each violating, directly the Exchange Act and Rule lob-5 lob-5 U.S.C. . $5 78j(b) and 780; 17 C.F.R. $5 240.10b-51, and from aiding and abetting violations of the [15 U.S.C. Bahamas and LOM Cayman and officers, agents, participation with directly or 5 and Securities Act Act U.S.C. $5 77e

66 and 77q(a)] and Section lo@) of the the
and 77q(a)] and Section lo@) of the thereunder, and abetting violations Act and and U.S.C. 5 78j(b); 17 C.F.R. $240.10b-51; . . . Enjoining Anthony Wile and officers, agents, servants, employees active concert or participation xiv. Ordering defendants pay civil penalties pursuant to Section of the the U.S.C. 5 77t(d)] and Section 21 of the Exchange Act defendant Anthony Wile, of the the U.S.C. 5 77t(e)] and Section 21(d)(2) of the Exchange Act [15 di

67 rector of registered pursuant Exchange A
rector of registered pursuant Exchange Act [15 U.S.C. of the the U.S.C. 5 78o(d)f; xvi. Permanently barring defendants Brian Lines, Lines, LOM Holdings, Ltd., LOM Bermuda, LOM Anthony Wile, Wayne Wile, Peever, participating in any offering penny stocks Securities Act Act 5 U.S.C. 5 77t(g)] andlor Section 21 (d)(6) of the Exchange Act 115 U.S.C. 5 78u(d)(6)]; and xvii. Granting such other relief as this may deem just and proper. Mark A. for Plaintiff EX