The Securities and Exchange Commission is investigating whether a director of the Bank of Virginia violated laws against insider trading in the purchase of about $1.5 million in stock in a Maryland bank that later agreed to merge with Bank of Virginia, the director's lawyer confirmed.

Juan March Delgado, a wealthy Spanish financier who controls the largest single stock interest in the Bank of Virginia, has disclosed to federal investigators that he may be "legally responsible" for the purchase of about 45,000 shares in Union Trust Bancorp of Baltimore made prior to the July 19 public merger agreement between Union Trust and the Bank of Virginia, according to his lawyer and a bank proxy statement filed with the SEC.

The disclosure represents the third time allegations of insider stock trading have hit the Virginia banking community in recent weeks. The president of United Virginia Bankshares Inc., the state's second-largest bank, was forced to resign over insider trading last Aug. 30, and a Bank of Virginia vice president was fired for insider trading on Aug. 1, also in connection with the Union Trust merger.

Jack Friedman, a lawyer for March in New York, yesterday called the alleged insider trading involving March a "mishap" and "an unfortunate situation." He added that "to the extent that any fault can be drawn, he is perfectly willing to take full responsibility."

An SEC spokesman, following standard policy, said he could neither confirm nor deny any agency investigation of March or the Bank of Virginia. A spokesman for the bank -- which disclosed the purchases involving March in a proxy statement mailed to stockholders -- also declined comment, saying "that is between Mr. March and his attorneys and the SEC."

According to Friedman, March had inadvertantly mentioned, in a private conversation last June, Union Trust Bancorp as one of several bank holding companies that would make potentially "interesting investments." That conversation came during a period in which Bank of Virginia and Union Trust had already begun preliminary conversations about a possible merger -- information March would have known as a bank director but that had not been disclosed to the general public.

The 45,000 shares -- apparently purchased by interests associated with March -- were bought between June 19 and July 5 at prices ranging from $34.75 to $40.50. After the purchase, the value of Union Trust stock shot up about $10 a share to $51.50, resulting in a profit of about $400,000, Friedman said.

Friedman refused to identify the party to whom March had mentioned Union Trust stock as an "interesting investment" or to identify who actually purchased the stock.

However, the Bank of Virginia had previously disclosed to the SEC that Banca March S.A., a Madrid-based bank controlled by March's family, had bought 123,918 shares in Union Trust bank -- or about 2.5 percent -- after the July 16 announcement at prices ranging from $49.50 to $51.50 a share.

Friedman said March learned about the earlier purchases of Union stock in September, at which point he "consulted counsel and said he wanted to take whatever action is necessary so there be no appearance of impropriety."

As March's lawyer, Friedman said he had been authorized to rescind the stock in question to the sellers or make "appropriate payments" that would reimburse them for the difference in value between the original selling price and the post-merger value.

Bank of Virginia is the state's third-largest, with total assets of $4.6 billion. The impending merger -- one in a series of recent interstate banking combinations -- would result in combined assets for the new company of $7 billion.

March has been a director of the Bank of Virginia since 1979, when, in a $20 million transaction, Banca March S.A. bought 15 percent of Bank of Virginia stock, making the Madrid bank the Bank of Virginia's largest single stockholder. March, 45, is the grandson of Juan March, who reportedly was the principal financier of Generalissmo Francisco Franco's army in the Spanish Civil War in the 1930s.