In 1974, Robert E. Brennan founded First Jersey Securities Inc., a brokerage firm that would specialize in the sale of low-priced stocks of small, little-known companies.

Not very long after that, the Securities and Exchange Commission began what would become a decade-long duel with Brennan and his company.

Over the decade, First Jersey prospered, with Brennan personally choosing many of the stocks to be sold by a growing corps of salesmen, whose insistent telephone prospecting for customers reflected Brennan's own intense zeal.

By this spring, First Jersey counted assets of some $80 million, 90,000 customers and 1,000 salesmen in 32 offices from coast to coast, including a Fairfax County office here, according to the company.

Brennan's frequent television ads for First Jersey made him one of the most familiar spokesmen for a financial firm on television, a rival of actor John Houseman, the voice of Smith Barney, Harris Upham & Co.

Yesterday, the SEC -- which twice before had taken First Jersey to court -- zeroed in on Brennan again. The stock market regulators charged in a civil suit that he and his firm had made more than $9.7 million by fraudulently misleading customers during the winter of 1982-1983, in thousands of transactions involving stock in three of the small companies in which First Jersey prides itself.

Brennan denied the SEC accusations yesterday, renewing his charge that he is an innocent victim of a vendetta by the government.

The last previous confrontation between the two sides ended last November when Brennan, his firm and the SEC agreed to a court order enjoining Brennan and his firm from violating the SEC antifraud rules. Brennan and First Jersey did not admit wrongdoing, and Brennan defended his innocence throughout.

In return, the SEC dropped its complaint against Brennan and the firm, a complaint that accused First Jersey of charging customers "excessive" and "unreasonable prices" for stocks and using its position as the principal buyer and seller of stock in the small companies to manipulate trading.

Before that, there had been repeated collisions.

Two years before the 1984 settlement, 22,000 pages of transcripts and evidence collected by the SEC from First Jersey's files disappeared without a trace from the downtown Manhattan federal office building. The missing documents, said Brennan, were essential for his defense and he sued the SEC.

When U.S. District Judge John Sprizzo ruled in the SEC's favor in the document case, Brennan named one of his race horses after the judge.

In both his company's financial success and its legal trials, Brennan has been the centerpiece. Born in a family of modest circumstances in New Jersey, Brennan became a millionaire many times over. He flew his own helicopter, starred in his own television and radio ads, and commuted to his firm's New York City headquarters from a mansion on the New Jersey shore.

At the core of the legal battle is First Jersey's particular approach to the securities business. By Brennan's account, the firm has amassed tens of thousands of satisfied customers by offering the stock of high-potential companies at prices of a few dollars a share.

The fact that First Jersey is typically the principal market maker -- the chief buyer and seller of many of the stocks -- results from Brennan's keen eye for spotting unrecognized up-and-comers, he says. There is risk, but the potential for big payoffs, he and First Jersey say.

Brennan spends at least 50 percent of his working time researching and developing his firm's relationship with companies whose securities will be sold by First Jersey, the SEC said yesterday. First Jersey underwrites 10 to 15 companies each year, with Brennan making the final choice of the companies.

The salesmen in First Jersey's branch offices are told by headquarters in New York which securities to buy and sell, and in nearly all cases, the firm is the middleman, buying from customers and reselling to other customers from its own holdings, the SEC said.

That central position in these transactions is either the source of the company's success and appeal to its customers, as Brennan puts it, or it is a key to the company's alleged wrongdoing, as the SEC alleges.

According to the SEC's complaint yesterday, First Jersey "induced customers to purchase and sell . . . securities at prices set by FJS [First Jersey], which dominated and controlled the public market for such securities; and failed to disclose that customers were given "profits" so that FJS could sell the same securities to other customers at significantly higher prices, the benefits of which inured exclusively to FJS and its employes and agents."

It is essentially the same case over which First Jersey and the SEC have been battling for the past decade.