The Securities and Exchange Commission failed to provide its equal employment opportunity office with sufficient independence and thus its EEO office does not conform to federal regulations, attorneys for the plaintiff in a sex harassment and discrimination suit against the SEC said yesterday.

Attorneys for Catherine A. Broderick, an SEC employe whose case is being heard by U.S. District Judge John H. Pratt, are seeking a permanent injunction against the agency. They attempted to show that it is a conflict of interest for the agency's EEO officer to have decisions reviewed by the SEC's general counsel's office -- the same unit that is defending the agency.

Broderick, whose suit alleges that she was subjected to an environment of sexual harassment at the Washington regional office of the SEC, where she worked from 1979 to 1984, filed a complaint with the EEO office in February 1984.

The final decision on that complaint, rendered in June 1986, found that "all in all, an atmosphere exists . . . where drinking and sexual involvements among staff are not unusual, and where most of it is engaged in by members of upper management."

However, while the internal EEO report acknowledged that many of the incidents in Broderick's complaint were true, it concluded that she "failed to establish that she had been subjected to a sexually harassing environment such that her ability to function as an employe was adversely affected."

Broderick's complaints about the atmosphere at the regional office, which was closed and consolidated with the Philadelphia office in 1984, also prompted an internal ethics investigation at the SEC. Pratt has ruled that that investigation's findings are not admissible.

Federal regulations governing the agency's EEO office state that the EEO officer "shall be established outside the office handling the personnel matters of the commission . . . {and} shall be under the immediate supervision of the chairman," according to court documents.

However, Ernest B. Miller Jr., the EEO manager at the SEC who issued the final EEO decision in the Broderick case, testified yesterday that when his predecessor left in late 1984, his position was changed from EEO director to EEO manager. Miller testified he was directed to report to Executive Director George Kundahl and to have his decisions authorized by the general counsel.

Phillip Savage, former EEO director, reported directly to the chairman of the SEC and was allowed to issue his own decisions. However, he was given that authority only after he filed his own EEO complaint at the agency, according to court testimony.

Benjamin Greenspoon, associate general counsel of the SEC and one of the attorneys defending it against Broderick's action, said in an interview yesterday that he believed the SEC is in compliance with U.S. regulations. He added that Kundahl is both executive director and EEO director, and he reports directly to the chairman. The personnel office also reports directly to Kundahl.

Asked why it took more than two years to complete the investigation of Broderick's complaint and issue a decision, Miller replied that when Savage left, there was "a backlog of cases because of the failure by the chairman's office to give Mr. Savage the authority to settle those complaints."

The current processing time for U.S. EEO complaints is about 530 days, according to a spokesman for the Equal Employment Opportunity Commission.

Many of the questions throughout the trial, which is expected to last through next week, have centered on whether Broderick's performance evaluations reflected retaliation from supervisors for her complaints about their conduct or were warranted. One of the issues constantly raised by the defense has been the fact that Broderick was often cited for being 10 or 15 minutes late for work.

Dr. James L. Titchener, a psychiatrist testifying as an expert witness for Broderick, testified that Broderick suffered from a depressive reaction caused by feeling trapped where she couldn't get promotions unless she went along with the situation at the office. He said she needs therapy to overcome it.

He said she also suffers from post-traumatic stress disorder, a result of cumulative periods of stress not unlike those suffered in any discrimination.

Pratt, responding to Titchener's remarks about the cumulative effects of race discrimination in housing, said: "It's a fact of life. We all have these things. We get over them. In Boston, there were ads that said NINA -- No Irish Need Apply. I'm sure those people went ahead and became mayors and judges. They got over it."