Prince William County officials said yesterday they have accepted a $2 million settlement from a New York brokerage that handled high-risk securities transactions that lost the county $1.05 million.
The Board of County Supervisors agreed to accept the settlement from County NatWest Government Securities Inc. because "litigation would be very extended," said County Attorney Sharon Pandak.
The $2 million will cover the losses and the county's legal fees, she said.
Prince William lost the money in 1987 when a mid-level manager approved high-risk "hedge" transactions that involved selling securities and promising to repurchase them later at a set price. Although the securities lost money, the county still had to buy them at the price agreed to.
The supervisors did not learn of the loss until 13 months after they occurred, and the county filed suit in May.
A Virginia state auditor said that the transactions might have been illegal and the county's finance director at the time, E. Barrett Atwood, might be liable. But Pandak said the county had no plans to pursue the matter with Atwood or Ronald Tucker, who handled the transactions. Both men resigned from the government this fall.
"The state auditor was concerned that the county recover those losses. Having done that, I see no reason for further" action, Pandak said.
Under the settlement, neither the county nor the brokerage admitted wrongdoing.
"I'm happy that we pursued the matter," said Supervisor John D. Jenkins (D-Neabsco). "This is a good settlement."
Attorneys for County NatWest could not be reached for comment.
County NatWest agreed last year to pay the State of West Virginia $2 million to settle a similar $10 million suit.
On another matter, County Executive James H. Mullen said he had appointed Lawrence A. Hughes to be assistant county executive. Mullen had eliminated Hughes's old position of deputy county executive as part of a reorganization this fall.