In a highly unusual move, the Justice Department has told the Supreme Court that it disagrees with a Securities and Exchange Commission censure of a securities analyst who told clients and a newspaper reporter about a massive fraud before he told the public.

In March 1973, Raymond L. Dirks received a tip from a former executive of Equity Funding Corp. of America that most of the insurance policies it reported as sold were nonexistent.

Dirks went to a Wall Street Journal reporter with the information and also told some of his clients about the irregularities at Equity Funding, one of the hot stocks on Wall Street in the early 1970s. Many sold their shares before trading was halted and Equity went bankrupt.

The SEC maintained that companies "tipped" to the scandal by Dirks sold $17 million of stock because of information not available to all investors. It ruled that Dirks was using inside information and that, as a result, the sales of the stocks made by his clients violated antifraud provisions of the securities laws and that Dirks aided and abetted those sales.

The SEC imposed on Dirks its mildest sanction -- a censure -- in 1981. It noted that, although he reported the fraud to the Wall Street Journal and, within weeks, to the SEC itself, he should be censured because he advised clients on inside information that is supposed to be made public.

Dirks appealed. Last March a federal appeals court panel upheld the SEC.

Dirks -- who subsequently headed the securities firm John Muir & Co., which went out of business last year -- then appealed to the Supreme Court. The SEC, in a brief filed this week, argued that the court had no reason to review the censure.

But in a footnote to the brief, Justice Department Solicitor General Rex Lee said that, while he authorized the filing of the brief, he disagrees with the SEC and the appeals court. In effect, the Justice Department sided with Dirks in his quest for a Supreme Court review.

The Justice Department said the information on which Dirks acted could not be considered "insider" information and that Dirks -- not an employe of Equity Funding -- had no obligation to "disclose that information before trading with it or passing it on."

The solicitor general said Dirks did nothing wrong in obtaining the information -- it came initially as an unsolicited tip -- and that the information he put together after receiving the tip was legally available to others who exercised similar "diligence or acumen."

The Department said that, by punishing the person who uncovered the fraud, the SEC would deter others who might be willing to report scandals. The Justice Department noted that the Supreme Court determined that a printer who stole information that was being prepared by his firm on a stock offering and traded on that information was not an insider.

"If a criminal is not an insider, how can a Good Samaritan be one?" said one government official close to the case. grap