A federal court judge in Roanoke has refused to block an investigation by the Securities and Exchange Commision in to the financial dealings of Peoples Bank of Danville, Va.

U.S. District Court Judge James C. Turk last Friday turned down a motion by the bank, which challenged the SEC's authority to conduct and investigation.

Peoples Bank argued that it had already been investigated - and cleared - by the Virginia banking authorities and by the Federal Reserve System.

Federal Bank regulatory authorities can be superseded by the SEC when fraud is suspected. But an attorney for the bank charges that the commision's regional office in Rosslyn, which is conducting the investigation, is using allegations of fraud as a lever.

"Our position is that the SEC is trying to do indirectly what it cannot do directly," said the bank's attorney, Jackson L. Kizer of Martinsville, Va. "By broad use of the fraud statutes the SEC is encroaching on bank regulators."

SEC attorneys in Rossyln refused comment on the case.

In the Civil complaint filed in January, the commission alleged questionable stock dealings by the bank during 1976 when Peoples Industrial Loan Corp., a state-regulated finance company became Peoples Bank, which is federally regulated.

In selling the stock of the newly formed bank, the SEC alleged "certain of its officers, directors and ageents and other persons made . . . untrue statements to prospecttive buyers.