Corporate exodus continues [Cayman Net News, Grand Cayman, Cayman Islands]

Jan. 19--The latest financial service company to pull out of the Cayman Islands is Bermuda-based investment firm LOM (Holdings) Ltd, the Royal Gazette reported.

According to the Gazette, following an exhaustive review of its regional business, the company decided in the interests of its clients and shareholders to consolidate the entire region in one office in Nassau, Bahamas, with the closure of its Cayman office at the end of March.

All of the staff and financial advisors in the Cayman office have reportedly been offered the opportunity to relocate to LOM's Bahamas or Bermuda offices.

Existing customers of LOM Securities (Cayman) Ltd will have the choice of moving their accounts to either Bermuda or the Bahamas.

The company's captive insurance and trust programmes will be serviced from its headquarters in Bermuda, with portfolio managers and advisors making regular visits to the Island to meet with the captive managers, lawyers and auditors that service its clients.

A statement from LOM said, "While LOM regrets this move after 15 years of being in Grand Cayman, it is part of a wider review of our strategy regarding overseas offices and offshore costs and ultimately reflects the realignment of the offshore investment environment over the past few years."

According to the company's website, LOM was founded in 1992 by brothers Scott and Brian Lines with initial backing from their father, Bermuda businessman Donald Lines, who is now chairman.

The operation is said to have grown substantially over the past 18 years into the LOM Group, a self-clearing investment management firm providing a full range of investment services and products through its regulated subsidiaries in Bermuda, Bahamas and Grand Cayman and a marketing office in London, England.

LOM today has over $1 billion in client assets under administration and provides brokerage, asset management, and corporate finance services to its primarily high net-worth individual and institutional customers in over 75 countries around the world.

In the meantime, LOM is currently embroiled in a fraud action by the US Securities and Exchange Commission (SEC), the trial of which could take place as early as next month in Manhattan.

LOM's Cayman subsidiary is one of several defendants to the action, which alleges that the defendants received "illegal proceeds" of at least $5.8 million by manipulating the stock of two publicly-listed "shell" companies, SHEP Technologies Inc., a Canadian corporation based in Vancouver, and Sedona Software Solutions Inc., a Nevada corporation based in Vancouver, from 2002 to mid-2003.The LOM parties have denied the allegations.

Also last week, XL Capital Ltd, an insurance and investment company, announced that it proposes to change the parent holding company's place of incorporation to Ireland from the Cayman Islands.

XL's Chief Executive Officer, Michael McGavick, said, "We believe that changing XL's place of incorporation from the Caymans to Ireland is in the best interests of XL and our shareholders. Among other benefits, we believe the proposed move will reduce certain risks that may impact us and offer us the opportunity to reinforce our reputation, which is one of our key assets, and to better support our global business platforms."

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