The president and vice president of Potomac Investment Advisors Ltd. of McLean have agreed to settle a Securities and Exchange Commission eivil complaint accusing them of violating securities laws and misusing clients' money.
The SEC complaint charged that Potomac officers misused a special account set up to handle funds of the company's 140 customers, for whom Potomac managed about $10 million in investments.
Potomac's president Willard J. Miller withdrew about $135,000 from the account for his own use, the SEC complaint alleged.
Miller also allowed about 40 of Potomac's customers to take more money out of the account then they were entitled. The SEC complaint does not specify whether the customers knew they were overdrawing the account.
The complaint charged that Miller's son, John Scott Miller, vice president of Potomac, failed to keep proper records of the Special account.
U.S. District Court Judge Albert Bryan Jr., in Alexandria, issued a permanent injunction Wednesday prohibiting the Millers and Potomac Investment from violating securities laws.
The defendants signed a consent order agreeing to accept the SEC settlement, without admitting or denying the charges.
Under the terms of the settlement, Potomac is prohibited from further trading in customers' accounts, except to liquidate them. The company also agreed to provide its customers with a full accounting of their funds, although the Millers said they could not afford to hire an independent accountant to do so.