Joseph E. Hall, former president of Flow General, a biomedical products manufacturer in McLean, has been cited for insider trading by the Securities and Exchange Commission and ordered to pay back $40,000 in profits he made by selling his company's stock before its price plunged.

Hall consented to the court order without admitting or denying guilt.

The SEC charged that Hall sold 8,002 of his approximately 140,000 shares of Flow General stock between April 5 and April 12, 1982 at prices ranging from $17 to $17 3/8 per share.

The complaint charges Hall realized a gain of $135,000 on the sale, which was $40,000 more than he would have made if he had not sold his stock before the company disclosed its profits were going to fall.

On May 4, Hall informed securities analysts that Flow General expected earnings for the third quarter of its 1982 fiscal year to decline substantially. After the announcement, the stock fell from $17 to $12 per share. The stock, which sold for as much as $45 1/2 in 1981, after Flow General received a contract from the National Cancer Institute to develop the drug interferon, closed yesterday at $10.

The SEC alleges that Hall learned in February and March that the company had suffered consecutive monthly losses; that sales were lower than projected; that 12 new products would not be introduced on time, and that Flow's European subsidiaries were anticipating lower results than projected.

Hall contends that he sold some of his stock without regard to the company's performance when his accountant told him in early April that he would have to pay a substantial amount of 1981 income taxes. He used half the proceeds from the stock sale to pay his taxes.

Reached yesterday at his home in Vienna, Hall said, "I am pleased to have the matter settled."

There are still several stockholder suits pending, however, against Hall and Flow General in connection with the alleged insider trading and a 1980 stock offering.

Hall, who had been the company's chief executive officer from the time it was organized in 1977, resigned in March of this year along with its chairman, Thomas E. Bazemore. This week, Potomac Television Productions, Inc. of Washington announced that Hall, a private investor and consultant, had provided venture capital financing to the television company.