Solon Automated Services, Inc., a Washington-based distribution if coin-operated washers and dyers, must pay $900,000 of commissions allegedly withheld fraudulently from its customers, under a Securities and Exchange Commission consent decree made public yesterday.
The payments must be made to the owners and managers of multi-family housing units where Solon machines are located.
Solon and most of its top executives, who were named by the SEC, consented to the complaint without either admitting or denying the charges.
The complaint, which was filed at federal court here, said that from 1966 the defendants entered into oral and written agreements with apartment home owners and others to install washers and dryers.
In exchange for using Solon equipment, the renters were paid commissions based on the amount of money deposited in the machines.
But the SEC alleged that Solon often did not pay the agreed percentage of commission. The equipment renter could not know the correct comssion owed because the money was taken from the machines by Solon employees, the SEC said.
The SEC became involved because Solon is a publicly owned company which is traded in the over-the-counter market. It is currently trading at about $4 a share.
Named as defendants were: S. Solon Cohen, founder and chairman of the company who holds about 54 per cent of its stock; M. Roy Cohen, his son, who is president; Laurie R. Cohen, a daughter and company employee; Milton J. Raport, vice president: Irving Stern, secretary treasurer, Lew Lewis, vice president; and Murray Rosenstock, a Solon manager.
Solon is the largest company in its field. It had sales for fiscal 1976, ehich ended Sept. 30, for $42.6 million and earnings of $3.4 million.
As a part of the settlement of the SEC suit, Solon agreed to follow SEC dictated accounting procedures.