The Securities and Exchange Commission strengthened its insider trading case against Dennis Levine today by unveiling sworn statements from Wall Street executives who confirmed that Levine had access to confidential information about corporate takeover targets in which he allegedly purchased stock.

The SEC has charged that Levine, a managing director with Drexel Burnham Lambert Inc., used confidential information to make $12.6 million in illegal profits by buying stocks on the basis of inside information during the last 5 1/2 years. As an investment banker specializing in mergers and acquisitions, Levine was aware of many secret merger negotiations, the SEC has alleged.

The statements from the Wall Street executives, including David Kay, head of Drexel's merger department, are critical because they link Levine's inside knowledge to stocks the SEC says he purchased through Bank Leu International, a Nassau, Bahamas, subsidiary of Bank Leu A.G. of Switzerland. For example, Drexel's Kay said Levine was the primary merger adviser to Coastal Corp. in its bid for American Natural Resources Co. last year, while the SEC alleges Levine made nearly $1.4 million in illegal profits by buying Coastal Corp. stock before the takeover bid was announced.

The SEC will use statements such as Kay's on Thursday afternoon when the commission asks U.S. District Judge Richard Owen to grant a preliminary injunction that would continue the freeze on $10.3 million in illegal trading profits Levine allegedly has on deposit with Bank Leu in the Bahamas. Owen has said that to continue the asset freeze, the government must show it has a "probability of success" in winning its case against Levine.

When it won a temporary freeze on Levine's funds earlier this month, the SEC said he was in the process of trying to transfer the money to a bank in the Cayman Islands. Through his attorneys, Levine, who also is the target of criminal obstruction of justice charges for allegedly trying to block the SEC investigation, has asserted his innocence.

"The Commission has . . . proven through depositions and affidavits of persons with direct knowledge that Levine possessed material nonpublic information concerning at least nine securities" that he purchased, the SEC said in its memorandum asking for the asset freeze. " . . . Second, the commission has shown that Levine purchased securities of at least 16 additional companies that were involved in major corporate transactions such as a merger or tender offer, in which his employer was, at the time of his trades, representing one of the parties to the transactions."

The SEC today also released Levine's personnel records detailing his Wall Street career at Smith, Barney Upham & Co. and Lehman Brothers Kuhn Loeb Inc., before he joined Drexel early in 1985. In those records, Levine signed statements indicating he had no stock brokerage accounts at firms other than his employer.

For example, on May 23, 1984, while the SEC charges Levine was trading various stocks through Bank Leu, he signed a Lehman Brothers agreement specifying, "I have no brokerage accounts." When he joined the firm several years earlier on Nov. 9, 1981, Levine signed the following statement:

"It is essential that all information concerning business carried on in this office, whether security transactions or otherwise, should be kept completely confidential. The stock-in-trade of a banker is his integrity and his respect for the confidence that others place in him. There can be no excuse for failure to observe this fundamental principle. I understand the foregoing."

In still another affidavit, John Sorte, the head of the energy group in Drexel's corporate finance division, described how Levine had first learned details of confidential negotiations over a merger of American Natural Resources and Coastal Corp.

Sorte described how he had been working on ways to finance a combination of the two companies. ANR was identified with the code name Gull at the time to keep its identity secret.

The deal was called off in late January 1985, and Sorte went to work with a group headed by investor Carl Icahn, who was interested in Phillips Petroleum. Levine, who was new to Drexel, joined him on the project.

"On the evening of Feb. 11 or 12, 1985, I received a telephone call from David Arledge, Coastal's senior vice president. At that time, Mr. Levine and I were working on the Icahn/Phillips transaction at the law offices of Gordon Hurwitz Butowsky Weitzer Shalow & Wein," Sorte said.

"Mr. Arledge advised me that, since we last met at the end of January, Coastal had been exploring alternative sources of financing for its acquisition of ANR and now wanted to discuss using the services of Drexel." After the telephone conversation, Sorte told Levine, who had been in the office when the call came in, what it was about and expressed his enthusiasm for the proposed transaction. "The information provided to me by Mr. Arledge and furnished to Mr. Levine was confidential," he said.

Levine began buying ANR stock on Feb. 14, according to the SEC allegations.

Coastal executives met with Drexel representatives, including Levine in the days thereafter. Levine's stock purchases of ANR ceased on March 1, according to the SEC -- the day the two companies issued a press release about the merger.