The Securities and Exchange Commission filed suit yesterday against nine defendants, including four New York City policemen, who allegedly made profits on a series of investments after illegally obtaining nonpublic information about the corporate clients of a prestigious New York law firm.

The law firm, Sullivan & Cromwell, is not named in the complaint, which was filed in U.S. District Court in Manhattan.

According to the SEC, the leaks mostly involved companies that had retained Sullivan & Cromwell to advise them on mergers and acquisitions or on internal reorganizations.

The companies on which information allegedly was obtained are Allied Stores Corp. in its acquisition of Garfinckel, Brooks Brothers, Miller & Rhoades Inc.; an unnamed corporation that Penn Central Corp. was considering acquiring; Mobil Corp. in its unsuccessful bid for Marathon Oil Co.; Signode Corp. for an internal reorganization; Tesoro Petroleum Corp. in its effort to improve the performance of its stock; and Fedelcor Inc. in its acquisition of Southeast National Bancshares of Pennsylvania Inc.

Reached by phone last night in New York, William Willis, a senior partner at Sullivan & Cromwell, said that the firm has been cooperating with the SEC's investigation for a number of months.

"We've found nobody in the firm who has traded on insider information, and we know of nobody who has disclosed any insider information or any other confidential information," Willis said.

The SEC, which did not disclose how the corporate information allegedly was obtained by the defendants, is seeking a court order enjoining the nine defendants.

According to the SEC complaint, one of the defendants, Dominick Musella of Queens, a former proprietor of Swirl and Curl beauty parlor, "has lived solely on profits derived from the securities transactions alleged herein."

Dominick, 42, has a brother John, 34, a New York City policeman assigned to the internal affairs division, who is named in the suit.

The SEC says that the defendants often bought stock options, which meant they only had to put down a small percentage of the price of the shares. Some of the defendants allegedly bought thousands of shares.

For example, when Mobil announced its tender offer for Marathon, the SEC says the defendants sold Marathon call options. According to the SEC, Dominick Musella realized a net profit of $572,495 on an investment of $76,845.