A U.S. District Court judge yesterday refused to block Bert Lance, a group of Arab investors from their effort to gain control of Financial General Bankshares Inc., the $2.2 billion Washington bank holding company.

At the same time, Judge Oliver Gasch ruled that stockholders who sold shares to the Lance group on the open market, without knowing a bid for control was under way, should have a chance to buy back their stock.

The offer to rescind the sales must be made before Lance and the Arabs make a public tender offer for the remaining shares of Financial General, Gasch said, in ruling on a civil lawsuit brought by the company seeking to block any attempts to gain control.

Gasch's ruling yesterday on the company's request for a preliminary injunction does not end the case. But Gasch said the company's demand for "broad injunctive relief is not warranted in this case".

Financial General officials indicated the company would have little to gain by pursuing the suit further.

Lance's own participation in the takeover bid is in doubt, however, following his settlement Wednesday of a Securities and Exchange Commission investigation of his Georgia banking activities.

In a letter to the SEC and the comptroller of the currency, Lance said he "will not during at least the next six months be involved in the management or control of any bank." He promised to give regulators 60 days notice if he intends to return to banking.

The letter, which was attached to the consent order signed by Kance, was widely interpreted as meaning Lance had agreed to stay out of banking for at least six months, as part of the settlement.

Lance's Washington attorney, Robert Altman, challenged that view yesterday. "Lance is nor barred from banking," Altman said The Settlement of the SEC complaint, "doesn't limit his right to be involved in this (Financial General) case."

Contending the letter was written voluntarily by Lance to keep federal officials apprised of his plans. Altman insisted the six-month absence from banking was not part fo the settlement.

"Nothing precludes him from being a member of the offering group" that has announced its intending to seek control of Finialcial General, Altman added.

But when the SEC announced terms of the settlement on Wednesday, Lance's letter was described as "necessary part of the settlement" by Theodore Levine, associate director of enforcement for the SEC. Levine said any instution controlling a bank was convered by Lance's pledge.

When advised of Altman's interpretation yesterday, Edward Herlihy, assistant director of enforcement for SEC, disagreed strongly. Lance's letter, Herlihy said, "is a voluntary commitment and representation not to do certain things, one of which is to be involved in the management or control of a bank.".

Both Herlihy and Levine, who played major parts in the Lance investigation, said a bank holding company like Finiancial General would be considered a bank, as far as Lance's pledge is concerned.

Noting that Lance also promised to give the "approprite federal regulatory agency 60 days advance written notice" if he decides he wants to return to banking, Levine said that was "to give regulators time to amke a decision of law if he wants to get back into banking".

Altman said Lance might decide for finiancial resons not to be a member of the group, which is expected to make a tender offer for all the stock of Finiancial General.

Lance, the Arabs and others agreed to make the offer as part fo the settlement to a separate SEC investigation of the Finiancial General sitution.

The earlier SEC case and Judge Gasch's ruling yesterday said Lance had acted on behalf of a group seeking control of the company. The group includes Eugene Metzger, a Washington attorney; Jackson Stephens, a Little Rock investment banker; Aga Hassan Abedi, president of Bank of Credit and Commerce International of London, and four wealthy Middle Eastern investors.

Over a period of several weeks, with Lance, Stphens and Metzger acting as their agents, the four Arabs each acquired about 4.9 percent of the stock in the company; Lance, Stephens adn Metzger acquired smaller blocks.

Gasch said yesterday that as soon as it acquired 5 percent of the shares the group was required by federal securities law to publicly report its purchases and its intent influences over Finiancial General.

Most of the person who sold stock to the group were closely associated with Finiancial General and knew what was going on, Gasch said. Most of the insiders received $2 to $3 per share more than the market price of shares, he noted.

But Gasch said many small investors, who sold their stock on the open market and got no premium, were entitled to relief. He ordered they be given the right to rescind the sales.