In yesterday's report on the Securities and Exchange Commission asking the Supreme Court to rule that anti-fraud provisions should apply to union-negotiated pension plans paid for by the employer, some words were dropped from the first paragraph. The first paragraph should have read: The Securities and Exchange Commission has urged the Supreme Court to rule that the antifraud provisions of federal securities laws apply to union-negotiated pension plans that are paid for by employers and cover employes automatically.

The Securities and Exchange Commission has urged the Supreme Court to rule that the anti-fraud provisions of the federal securities laws apply to union-negotiated pension plans that are paid for by employes automatically.

Strongly disgreeing with the Justice Department in one of the most important cases awaiting argument and decision in the court term starting in October, SEC General Counsel Harvey L. Pitt warned of far-reaching adverse consequences to investors if his argument is rejected.

A decision that the anti-fraud provisions don't apply to pension plans "would have the effect of undermining over 40 years of judicial and administrative interpretation of those laws," Pitt said in a friend-of-the-court brief.

This would "jeopardize the protection provided by the securities in other contexts not involving employment or pension plans," he wrote.

Pitt filed his 102-page statement late last Friday, 14 days after Solicitor General Wade H. McCree, siding with the Labor Department in a friend-of-the-court brief submitted "on behalf of the United States" contended that anti-fraud provisions don't apply to so-called involuntary, non-contributory pension plans.

Such plans - the largest single source of private investment - have $264 billion in assets and enroll 37 million workers, the Labor Department estimates.

" . . . If policy goals related solely to pensions justify denial of anti-fraud protections to investors in pension funds, that determination should be made directly by the Congress," Pitt argued.

Congressional hearings are now being held on a bill to amend the Employee Retirement Income Security Act (ERISA) of 1974 to exempt pension plans from the Securities and Exchange Acts of 1933 and 1934.

Although ERISA provides some important protections to participants in pension plans, "it does not provide the same type of protections as the anti-fraud provisions," Pitt said. And, he wrote, "nothing in ERISA conflicts with the anti-fraud provisions. ERISA did not pre-empt federal securities laws but, instead, expressly preserved all federal laws . . . "

Pitt contended that application of the anti-fraud provisions would not cause "intrusion or disruption" of the ERISA regulatory scheme, would not impose an additional set of regulations on pension plans, would not create a "burdensome task" for those who make no false or misleading representations about pension plans, and would not subject such plans to massive retroactive liability.

Pitt seeks an affirmance, and McCree a reversal, of a 1977 ruling by the Seventh U.S. Circuit of Appeals that the anti-fraud provisions protected Chicago truck driver John B. Daniel, whose employers made payments in his behalf, for 18 years, to the Pension Trust Fund of Teamsters Local 705.

The local had led Daniel to believe unquestioningly that he would collect a pension, never telling him that a requirement of unbroken service would disqualify him because he once had been laid off - involuntarily - for three months.

Petitions for review of the appellate court ruling, granted by the Supreme Court in February, were filed by the local and the International Brotherhood of Teamsters.

Supporting friend-of-the-court briefs were filed by some unlikely allies, including the AFL-CIO and the National Association of Manufacturers. Daniel's supporters include two non profit organizations, the Gray Pamthers, which represents the elderly, and the Pension Reforem Group.

In the SEC brief, Pitt expressed particular concern that two terms "basic to the coverage of the antifraud provisions" not be construed to so as to jeopardize their application "to the countless schemes through which fraud is perpetrated on investors generally."

The terms are: "Investment contract," said by Pitt to be, in this context," an employee's interest in a pension fund," and a "sale," defined here as an employee's acquisition of an interest in an involuntary, non contributory pension plan.