The Swiss government announced yesterday that it will turn over to the U.S. Securities and Exchange Commission documents the agency said it needs to prosecute five investors who allegedly made massive insider trading profits in the $2.5 billion takeover of Santa Fe International Corp. by Kuwait in 1981.

The decision is a landmark in the U.S. government's attempts to penetrate the cloak of Swiss bank secrecy laws. But it took the United States nearly three years of intense legal and diplomatic maneuvering to get the Swiss federal council, that nation's supreme executive authority, to agree to cooperate.

The investors -- including Khalid bin Hammad al Thani, Qatar's interior minister -- allegedly used Swiss bank accounts to buy both options in Santa Fe stock and the stock itself before Kuwait's bid was announced and made $5 million in profits.

Santa Fe stock soared after the takeover bid was announced in October 1981.

The five investors allegedly used Swiss bank secrecy laws to hide their identities from U.S. authorities and prevent the SEC from obtaining the proof it needed to prosecute them.

Last year, the Swiss government released the five names the SEC sought, but not the underlying documents and bank records.

John Fedders, chief of enforcement for the SEC, said he was pleased that the Swiss finally agreed to cooperate with the agency.

But Fedders said the three-year delay and the huge investment of SEC resources required to obtain the documents show that the current treaty arrangement between the United States and Switzerland does not work.

"In my view, for law enforcement to be effective, it must be swift. A three-year delay in a single case does not support the commission's principal law enforcement goal -- namely, deterrence," Fedders said in a telephone interview.

In late 1981, the SEC was able to persuade a federal judge to block the $5 million from being transferred to the Swiss banks. That money remains frozen. Fedders then went to Switzerland in February and March of 1982 to file a formal treaty request for assistance in prosecuting the insider trading case.

The Swiss finally decided yesterday that none of the nation's essential interests were at stake in the case and ordered that the documents could be made available to the SEC.

Fedders said that the United States should adopt a so-called "waiver by conduct" rule under which any individual or institution that buys or sells securities in the United States automatically waives the applicability of foreign secrecy laws. He said that foreign governments with secrecy laws might resist such a rule as an attempt by the United States to enforce its laws abroad.