SEC v. Brian Lines, et al., 1:07-cv-11387 (DLC) (S.D.N.Y.) (the “Civil Action”)

Welcome to the Brian Lines, et al. Fair Fund Website

Individuals and entities who purchased stock in the public entities identified below during the corresponding Relevant Periods, and suffered a loss as a result of the conduct described in the Complaint in the above Civil Action, may be eligible for a distribution from the Brian Lines, et al. Fair Fund (the "Fair Fund").

In addition to reviewing the information on this website, you should review the Distribution Plan Notice and the Distribution Plan approved by the Court, both of which you can find on the “Important Documents” tab on this website.

You should visit this website often to get the most up-to-date information on the Brian Lines et al. Fair Fund.

Overview

The Civil Action

On December 19, 2007, the Securities and Exchange Commission (“SEC” or “Commission”) filed a Complaint against brothers Brian N. Lines (“Brian Lines”) and Scott S. Lines (“Scott Lines”), six entities controlled by the Lines brothers (the “LOM Entities”), and six other defendants (collectively, the “Defendants”).  The Commission alleged a pair of separate, but similar, fraudulent schemes in which the Defendants manipulated the stock prices of two microcap companies, Sedona Software Solutions, Inc. (“Sedona”) and SHEP Technologies, Inc. (“SHEP”).  During the period of the frauds – for Sedona stock, January 21, 2003 to January 29, 2003, and for SHEP stock, February 19, 2003 to June 24, 2003 (collectively, the “Relevant Periods”) – the shares of both companies were quoted and traded on the OTC Bulletin Board.  The schemes involving the participation of the LOM Entities, Caribbean area-based entities owned by Brian Lines and his family, as well as stock promoters in Canada, and others took in illegal proceeds of approximately $5.8 million from the sales of Sedona and SHEP common stock.

The Brian Lines et al. Fair Fund

On October 14, 2010, the Court entered Final Judgments and ordered: (a) Brian Lines and five (5) of the LOM Entities to pay, joint and severally, $1,932,321 (disgorgement of $1,277,403 and prejudgment interest of $654,918) (Dkt Nos. 217, 220, 221, 222 and 223); (b) Brian Lines to pay a civil penalty of $100,000 (Dkt No. 225); (c) Scott Lines to pay a civil penalty of $50,000 (Dkt No. 219); and (d) the five LOM Entities to pay, jointly and severally, a civil penalty of $450,000 (Dkt No. 217).  Brian Lines, Scott Lines and the five LOM entities paid the full amounts ordered ($2,532,321).  Defendants Phillip James Curtis (“Curtis”), William Todd Peever (“Peever”) and Robert J. Chapman (“Chapman”) defaulted on payments ordered pursuant to their Final Judgments (Dkt No. 240).  In September 2019, the SEC, through its collection efforts, recovered approximately $263,693.82 from the sale of property owned by Defendant Curtis.  The Final Judgments for Defendants Anthony Wile and Wayne Wile required them to make payments to the SEC and did not specify that their payments should be added to the Fair Fund (Dkt Nos. 218 and 224).  The civil action as to Defendant Leeds was dismissed without prejudice on May 9, 2008 (Dkt No. 10).

To date, Brian Lines, Scott Lines, and the LOM Entities have paid the full amounts ordered, which total $2,532,321.  These funds, together with the $263,693.82 recovered from Curtis, comprise the Fair Fund of approximately $2.9 million (the “Fair Fund”) established by the Court’s December 19, 2019 Order, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so that the Fair Fund could be distributed to harmed investors (Dkt No. 246).

The Fair Fund is currently on deposit with the Court Registry Investment System (“CRIS”).  Any additional funds received pursuant to the final judgments, described above, will be added to the Fair Fund for distribution to harmed investors.

Distribution Plan

On December 2, 2021, the United States District Court for the Southern District of New York approved a plan for the distribution of the Brian Lines, et al. Fair Fund (the “Plan”).  The Plan governs the administration and distribution of the Brian Lines, et al. Fair Fund and sets forth the method and procedures for distributing the assets of the Brian Lines, et al. Fair Fund to investors harmed by the conduct alleged in the Complaint.

Claims

If you purchased the securities set forth above during the corresponding Relevant Period and would like to be considered for eligibility for a distribution from the Brian Lines, et al. Fair Fund, you must submit a completed Proof of Claim Form (“Claim Form”), including adequate supporting documentation and a completed tax certification, to the Distribution Agent no later than March 30, 2022.  

How do I obtain more information?

Additional information can be found by visiting the “Important Documents” tab or the “Frequently Asked Questions” tab visible at the top of this webpage.  If you have questions not answered through this website, you may contact the Distribution Agent toll-free at 1-833-961-3965, by email at Info@SECvBrianLinesetalFairFund.com, or by mail at:

Brian Lines, et al. Fair Fund
c/o JND Legal Administration
PO Box 91405
Seattle, WA 98111