One of the most successful government deregulation efforts of the Reagan era has spurred financial deal-makers to offer far larger amounts of stock, bonds and partnership interests in the private market than would have been possible just five years ago. Now, that success is leading some state regulators to tighten the same kinds of rules that the federal regulators loosened in 1982.

"Some states are just not comfortable with the deregulation that is going on," says Georgia's securities commissioner, Wayne Howell, who is president of the North American Securities Administrators Association. "Raising private capital is easier today than it has ever been, and I question whether that is appropriate. I can't help but believe that with all this deregulation going on, the pendulum is starting to swing back."

Private placements always have been allowed under securities laws: When a budding entrepreneur sold stock to aunts, uncles, and next-door neighbors, the deal did not have to be registered with the Securities and Exchange Commission. But in 1982 the agency spelled out, in its Regulation D, the types of deals that could be considered private and, therefore, exempt from registration. Those rules were so permissive that now "private placements are being made much bigger, to more people, than would have been dreamed up before," says Charles S. Gittleman, a New York securities lawyer. David Bernard of Concord Assets Group Inc., who uses private placement for a lot of the real estate syndications he puts toghether, agrees: "Five years ago, a $2 million syndication was considered respectable; today, $15 million placements are everyday stuff."

People and companies taking advantage of the new SEC rules must file a notice with the agency, but the papers pile up on shelves without getting much attention. In all, the number of deals probably is about 10,000 a year, taking in about $25 billion annually. Bernard estimates that 10 years ago, the total would have been under $2 billion.

The relaxed rules for private placements are being used to finance everything from feature films to restaurant franchises to new drug research. Essentially, all that the SEC demands is that investors be contacted through some private network -- advertising for them is a no-no -- and that most of the buyers be rich enough to absorb the potential losses.

The state regulators, however, refuse to equate wealth with the ability to do a sophisticated investment analysis. "We feel the rich person is entitled to as much protection as a not-so-rich person," argues Michael Unger, securities commissioner of Massachusetts. "We mean to subject private placements to very strict review." The SEC decision to exercise less scrutiny over private placements "is leading us in the direction of the states becoming more active," Unger says.

For instance, a new Massachusetts rule refuses to allow the sale of partnership interests that include a blanket indemnification for the general partner if things go wrong. Most general partners insist on such protection. In Pennsylvania, authorities refuse to allow the sales literature for deals to include any financial projections not first endorsed by an independent accountant or other expert. That leads some deal packagers to avoid the Keystone State entirely, and others to draw up two sets of their prospectus. Tennessee requires audited financial statements from the general partner in any partnership deal.

That proliferation of local rules means that there is "currently a very, very disorderly regulatory situation" for private placements, Gittleman told a seminar on the issue run by the Practicing Law Institute. "These things are fraught with a great deal more peril than you think," he warned his peers.

The fact is that most securities lawyers who keep up on all the latest SEC interpretations spend a lot less time watching the developments in state law. And the peril is not so much that a state regulator will bring an action against an underwriter who violated a local rule -- although some jurisdictions are beefing up their enforcement staffs -- but that the rule violation will provide an unhappy investor with a legal loophole out of a deal a year or more later. "Of course, if the investors make a lot of money, nobody cares whether you complied with the regulations or not," concedes Mary E. T. Beach, the SEC associate director most involved in overseeing private placement regulation. "Only sour deals get sued on."

But even a technical violation, such a being a day late in filing a form with a state securities commissioner, would give someone who wants to pull out of a deal the basis for a suit to rescind the entire contract. The proliferation of state technicalities "give the investor a free look at the deal; if it doesn't work out, they can get their money back," says Linda A. Wertheimer of Dallas, who heads an American Bar Association committee on partnerships.

Those state concerns are not going to slow the surge in private placements: The SEC climate is simply too attractive to those who want to raise money and those looking for a tax shelter or a ground-floor chance in a new venture. But tougher state rules do guarantee increasing legal tension -- and expensive litigation -- over the question.