The total staff of the Securities and Exchange Commission is about 1,930. A story in Sunday's Business section stated an incorrect number.

"Image is important to the agency, but we can't bring cases merely for the purpose of enhancing our image," said Gary Lynch, enforcement chief for the Securities and Exchange Commission.

Even so, that image has received some polishing in recent weeks from two high-visibility cases that have jarred Wall Street's preoccupation with the money game.

In the first, the SEC this month charged First Boston Corp., a major investment banking firm, with taking advantage of confidential information about financial problems of one of its client, Cigna Corp., to make a profit trading Cigna securities. First Boston agreed to pay $396,414 in fines and penalties.

In the second, the SEC charged investment banker Dennis Levine with amassing $12.6 million in illegal profits by using secret information about pending corporate deals that he worked on or that he heard about to play the stock market.

Although the SEC generally gets high marks for the talent and the doggedness of its enforcement division, its resources are no greater now than they were five years ago, despite a 300 percent increase in the volume of trading on the New York Stock Exchange.

The SEC's enforcement division has a staff of about 600 nationwide; the agency's total staff is fewer than 1,300. With those resources, noted Ira Lee Sorkin, chief of the SEC's New York enforcement division, the SEC regulates "an industry in which about 50 million individuals own stock and in which Merrill Lynch has 11,000 registered agents in about 500 branch offices worldwide."

Friends and critics alike have questioned whether fast-moving developments in the securities markets and the rapidly rising volume in transactions are leaving the enforcers in the dust.

With the increase in mergers and acquisitions in recent years has come another phenomenon. Stocks take suspicious, prescient leaps in advance of major announcements, making cynics out of investors and leading many to conclude that insider trading has become the rule. Protecting public confidence in investment markets is a central premise for the prosecution of insider trading -- the buying or selling of securities based up important, nonpublic information. The prohibition affects not only corporate officers and other insiders, but anyone possessing such information.

Unable, by virtually everyone's account, to monitor this far-flung corps of insiders, the SEC must count on deterrence to help limit abuses. In that respect, the two recent cases had Wall Street's attention last week.

"What we hope to do is, by bringing cases and achieving good relief in those cases and working closely with the Justice Department, particularly in the Southern District of New York, to put people in jail for insider trading and perjury and obstruction of justice, is to discourage it," said Lynch.

Levine, who is alleged to have tried to hide his activities by trading under phony names through a Bahamas subsidiary of a Swiss bank, faces criminal charges for attempting to block the SEC probe and is free on $5 million bail. He is also under a preliminary injunction barring him from violating securities laws and freezing $10.3 million in assets in an account in the Bahamas that the SEC says is his. He has disputed the SEC's charges.

The outline of the Levine investigation thus far indicates that the SEC believes he benefitted not only from information he got directly as an investment banker, but also from tips from others outside the firms where he worked. What Wall Street has seen of the case so far has created fears that others may be implicated.

Edward Herlihy, a former SEC enforcement attorney now in private practice, said last week that actions like the Levine investigation "are the kind of cases that have maximum deterrent effect. You can't try every case. You have to get as much bang for the buck as possible."

Rep. Timothy E. Wirth (D-Colo.), chairman of the House Energy and Power subcommittee, which oversees the SEC, agreed.

"Because of its limited staff resources and the tremendous growth in the markets, the SEC has to bring the kind of cases that send clear signals," said Wirth, chairman of the House Energy and Commerce subcommittee on telecommunications, consumer protection and finance. "The commission is showing that Wall Street is not immune and that traders cannot be assured of hiding behind foreign secrecy laws." One key to bringing the Levine case was ferreting out his identity despite bank secrecy laws in the Bahamas.

But Richard M. Phillips, a former SEC staff attorney and head of the American Bar Association's securities regulation committee, said last week that the Levine case doesn't erase his concerns about the SEC's capabilities.

"It's one case. It's not a great display of enforcement power to catch someone who allegedly did 54 transactions over six years. I continue to believe the SEC is using its limited resources well. The fact they were able to catch someone who allegedly traded on inside information for that long, if anything suggests that they need help . . . .

Because of budgetary pressures on the commission, "that help is not forthcoming," he said.

The question about the SEC's enforcement performance triggered a three-hour debate between SEC Chairman John S. R. Shad and two of those critics before Wirth's subcommittee in March.

The head of the state securities regulators association called the SEC's resources inadequate to cope with "an epidemic of securities fraud." Royce O. Griffin, Colorado Securities commissioner and head of the North American Securities Administrators Association, told Wirth's subcommittee: "Clearly, the commission staff has not been able to keep up with the expansion of the marketplace, and we cannot expect it to . . . .

"The truth is that the level of federal securities enforcement is so low that more and more shady and fraudulent deals are worth the risks for unscrupulous sellers," Griffin said.

Shad challenged Griffin. "The evidence in support of an epidemic relative to the market today, is shallow. I don't think the facts support it," he said.

A comparison of SEC activities in 1981 and 1985 document the commission's increasing effectiveness, Shad said: Enforcement actions last year totaled 269, or 41 percent more than in 1981, and when other federal agencies have been hard hit by spending limits, the SEC's budget has risen 35 percent over the same period, he said.

The SEC's reach is extended, he added, by the internal surveillance of the stock exchanges and securities dealers associations, using increasingly sophisticated electronic monitoring of stock trades.

But Phillips contended at the March hearing that Shad's numbers mask a serious decline in SEC capabilities. Comparing last year's efforts with those of a decade ago, Phillips said that SEC injunctive actions and administrative proceedings have declined from 316 in 1975 to 265 last year, while the number of broker-dealers, investment companies and other securities market participants have increased 100 percent or more during the decade.

The New York Stock Exchange and other self-regulating market organizations refer about 100 cases of suspected insider trading to the SEC each year. These referrals result in about 20 enforcement actions, a one-in-five ratio that some critics cite as evidence that the SEC can't keep up with the problem.

"That's inaccurate. The truth of the matter is we do look at all of them. In some of them, the case isn't there," said Lynch, the SEC enforcement chief. "In others, we believe in our hearts that people probably violated the law, but we can't prove it. So we don't bring those," he added. Last year, federal prosecutors thought they had a strong insider trading case against former presidential adviser Thomas C. Reed, but a jury acquitted him, demonstrating the difficulty possible."

Rep. Timothy E. Wirth (D-Colo.), chairman of the House Energy and Power subcommittee, which oversees the SEC, agreed.

"Because of its limited staff resources and the tremendous growth in the markets, the SEC has to bring the kind of cases that send clear signals," said Wirth, chairman of the House Energy and Commerce subcommittee on telecommunications, consumer protection and finance. "The commission is showing that Wall Street is not immune and that traders cannot be assured of hiding behind foreign secrecy laws." One key to bringing the Levine case was ferreting out his identity despite bank secrecy laws in the Bahamas.

But Richard M. Phillips, a former SEC staff attorney and head of the American Bar Association's securities regulation committee, said last week that the Levine case doesn't erase his concerns about the SEC's capabilities.

"It's one case. It's not a great display of enforcement power to catch someone who allegedly did 54 transactions over six years. I continue to believe the SEC is using its limited resources well. The fact they were able to catch someone who allegedly traded on inside information for that long, if anything suggests that they need help . . . .

Because of budgetary pressures on the commission, "that help is not forthcoming," he said.

The question about the SEC's enforcement performance triggered a three-hour debate between SEC Chairman John S. R. Shad and two of those critics before Wirth's subcommittee in March.

The head of the state securities regulators association called the SEC's resources inadequate to cope with "an epidemic of securities fraud." Royce O. Griffin, Colorado Securities commissioner and head of the North American Securities Administrators Association, told Wirth's subcommittee: "Clearly, the commission staff has not been able to keep up with the expansion of the marketplace, and we cannot expect it to . . . .

"The truth is that the level of federal securities enforcement is so low that more and more shady and fraudulent deals are worth the risks for unscrupulous sellers," Griffin said.

Shad challenged Griffin. "The evidence in support of an epidemic relative to the market today, is shallow. I don't think the facts support it," he said.

A comparison of SEC activities in 1981 and 1985 document the commission's increasing effectiveness, Shad said: Enforcement actions last year totaled 269, or 41 percent more than in 1981, and when other federal agencies have been hard hit by spending limits, the SEC's budget has risen 35 percent over the same period, he said.

The SEC's reach is extended, he added, by the internal surveillance of the stock exchanges and securities dealers associations, using increasingly sophisticated electronic monitoring of stock trades.

But Phillips contended at the March hearing that Shad's numbers mask a serious decline in SEC capabilities. Comparing last year's efforts with those of a decade ago, Phillips said that SEC injunctive actions and administrative proceedings have declined from 316 in 1975 to 265 last year, while the number of broker-dealers, investment companies and other securities market participants have increased 100 percent or more during the decade.

The New York Stock Exchange and other self-regulating market organizations refer about 100 cases of suspected insider trading to the SEC each year. These referrals result in about 20 enforcement actions, a one-in-five ratio that some critics cite as evidence that the SEC can't keep up with the problem.

"That's inaccurate. The truth of the matter is we do look at all of them. In some of them, the case isn't there," said Lynch, the SEC enforcement chief. "In others, we believe in our hearts that people probably violated the law, but we can't prove it. So we don't bring those," he added. Last year, federal prosecutors thought they had a strong insider trading case against former presidential adviser Thomas C. Reed, but a jury acquitted him, demonstrating the difficulty of proving insider cases based solely on circumstantial evidence, SEC officials acknowledged.

Dennis Block, another former SEC attorney now in private practice, last week voiced the commonly heard frustration about the task confronting the SEC. "I think if you're talking about insider trading, you could have ten times the number of attorneys and not make a dent."

And insider trading -- although a top priority now -- is far from the SEC's sole concern.

More enforcement resources are devoted to financial fraud and disclosure violations than to insider trading cases, according to Lynch. Those cases are more difficult to investigate and take more time and people, but those cases "can be just as important for the investor," said John Sturc, associate director of the SEC's enforcement division in Washington.

One example of those types of cases is a series of SEC actions in which six banks were accused of keeping loan reserves too low in order to make their earnings look better.

The SEC also monitors investment advisors and investment companies, the solvency of securities firms and investigates allegations of stock manipulation.

To a large extent, according to SEC officials, the market determines how its resources are allocated. "We have less control over what to do with our resources than what people may think. We have to focus on the current problems," said Lynch. "We don't determine that. The market does."

"We are reactive," said Sorkin. "In the late 1960s and early 1970s, we focused on the over-the-counter market, the hot issues market -- stocks that were going public at $5 a share and three weeks later were trading at $50 a share." During the 1970s, the SEC also pursued a number of cases of companies that had paid bribes to political figures in foreign countries, alleging that the companies should have disclosed such practices to shareholders.

Just ahead, the SEC sees a growing challenge to deal with the internationalization of securities markets, as electronic networks forge closer and closer links between traders and investment bankers in North America, Europe and Asia.

Although the SEC has no figures to bear it out, Lynch says he believes his division is displaying an increasing willingness to go to court and litigate rather than settling cases. The SEC's prosecution of an insider trading case against former deputy defense secretary Paul Thayer, which led to a four-year prison sentence in 1985, was meant to be a "strong, unambiguous message" to those who would violate insider trading prohibitions, Lynch said last year.

"Their efforts on insider trading have certainly yielded some very good cases," said John R. Perkins, Missouri's commissioner of securities and head of the enforcement section for the North American Securities Administrators Association. But he added: "The deterrence is there for the people who are going to be affected by any kind of deterrence. I think there are people who, even if you made insider trading a capital offense, might engage in it thinking they wouldn't get caught."