It was supposed to be a routine legal assignment. At least that's the way it appeared to Washington attorney Doug Rosenthal when he agreed about a year ago to become the official guardian of disgraced stock speculator Ivan F. Boesky's forfeited fortune.

What it has become, however, is a legal mess of Dickensian proportions. And there are few signs that it will be resolved anytime soon.

At the center of the story is a large pile of money -- somewhere between $75 million and $100 million in cash and securities, depending on how you figure it. Few people involved in the case can agree on how big the pile of money actually is, or on how big it was when the case started, which is one of the problems.

The money, and all the difficulties attached to it, made its way to Rosenthal's care from Boesky via the U.S. government. Rosenthal, 48, an ebullient lawyer with offices near the National Theatre, was appointed last year to oversee the distribution of cash and securities forfeited by Boesky as part of his unprecedented settlement of insider stock trading charges brought by the Securities and Exchange Commission.

The idea was that Rosenthal, acting as an escrow agent, would help to funnel the funds to their appointed destinations: the U.S. Treasury and those investors damaged by Boesky's improper stock trading. It sounded simple.

"This has turned out to be much more interesting than I expected," Rosenthal said.

One year and 3,500 billable hours later -- the equivalency of one and three-quarters lawyers working full time for a year -- the job has yet to be completed. Moreover, the question of what to do with the cash and securities forfeited by Boesky has produced a thicket of legal controversy. Over the past year, Rosenthal has found himself sharply at odds with parties wishing to buy Boesky's securities and with the SEC, according to a number of people involved.

"These were complex, novel questions, and I think differences can be expected," Rosenthal said. And if the turmoil has produced some angry exchanges -- usually unflappable SEC enforcement director Gary Lynch is said by sources to have lost his composure at times during debates over how to handle the money -- Rosenthal has not been bothered. "I enjoy litigating," he said. "Contentiousness is not a problem for me."

One reason people involved have gotten hot under the collar is that while the legal fees continue to mount, most of the pile of money forfeited by Boesky has sat undisturbed.

Despite hundreds of thousands of dollars in legal fees expected to be paid out of the Boesky assets to Rosenthal's firm -- Sutherland, Asbill & Brennan -- and despite the hiring of additional legal and financial advisers in New York and London, none of the $50 million in cash earmarked for investors has been distributed, and most of the Boesky stock remains unsold.

To make matters worse, in the 15 months since Boesky turned over the cash and stock, the value of the stock appears to have dropped by at least $20 million. And some people involved question whether the stock was ever worth the $50 million represented by the government at the time the deal with Boesky was announced in November 1986.

The saga actually began, according to court documents and interviews with more than a dozen people familiar with the situation, two months before Boesky's settlement deal was disclosed.

In September 1986, Boesky secretly agreed to settle insider stock trading charges and to cooperate with federal investigators by taping conversations with Wall Street colleagues. At that point, secrecy was an overriding concern for the government. So the SEC sought an escrow agent who could help arrange the transfer of Boesky's assets to the government without blowing Boesky's cover.

On the advice of Boesky's Washington attorney, Harvey Pitt, the SEC turned to New York lawyer David Weisberg, a former partner in Pitt's firm. Just before the Boesky settlement was announced Nov. 14, Weisberg met with bank officials in New York to arrange for the transfer of funds.

Of the money forfeited, the $50 million in cash represented a disgorgement by Boesky of illegal stock trading profits earned from insider tips provided by former investment banker"This has turned out to be much more interesting than I expected." -- Doug Rosenthal, escrow agent and convicted felon Dennis B. Levine. The stock portion -- shares in the British firm Cambrian & General Securities and in U.S.-based Northview Corp. -- represented a penalty Boesky agreed to pay under the Insider Trading Sanctions Act. After the shares were sold, the proceeds would go to the U.S. Treasury.

Within two months, however, Weisberg became embroiled in a dispute with the SEC and resigned as the escrow agent. Weisberg had a client involved in a suit arising from Levine's insider trading, and even though that case was not directly connected with Boesky, the SEC felt it was a conflict of interest. But Weisberg refused to end his participation in the Levine suit, insisting that there was no conflict. The SEC asked him to resign, and Weisberg obliged.

"I wasn't deferring to their judgment, I was deferring to their wishes," Weisberg said of his decision. "If a client feels somewhat uncomfortable with your representation, I'm happy to step aside. I respectfully disagreed with their judgment."

Enter Rosenthal, a former Justice Department attorney with extensive experience in international litigation. Rosenthal, too, once worked at the same law firm as Pitt and Weisberg.

Problems arose almost immediately. First off, there were questions about the true value of the Cambrian and Northview shares turned over to the government by Boesky. SEC papers released at the time of the settlement said the shares had "an estimated aggregate value of $50 million" -- which, combined with the $50 million in cash, brought the total of Boesky's forfeiture to the round number of $100 million.

Of the estimated $50 million attributed to the stock portion, most of the value was derived from the shares in Cambrian, a London-based investment fund. Although the combined market value of the Northview shares and the "net asset value" of the Cambrian shares forfeited by Boesky totaled about $57 million on the day Boesky's settlement was announced, it was clear to some government officials involved that attaining Cambrian's full value could require liquidating the entire fund. (In this case, net asset value is the value of the stock owned by the Cambrian investment fund that could have been realized in a liquidation.)

But there turned out to be no practical way to quickly liquidate the Cambrian fund. Questions arose over whether Boesky had the legal right, because of his fraudulent activities, to transfer title of his Cambrian shares. There were questions, too, about the legal liabilities of Cambrian's British directors. And public disclosure of Boesky's wrongdoing depressed the value of Cambrian's stock by forcing the firm to take write-offs against future liabilities.

Despite these problems, Rosenthal tried to find a buyer for the Cambrian shares, and by last August, he was on the verge of reaching an agreement with New York-based Mutual Shares Corp. In that deal, Mutual would have bought the Cambrian stock for about $37 million. But new complications arose.

Faced with complaints from a British firm, Investing In Success Equities, that it was being shut out of negotiations by Rosenthal, and worried that Rosenthal hadn't done enough to get the highest possible price for the Cambrian stock, high-ranking SEC officials demanded that Rosenthal seek other bids besides the one from Mutual Shares.

But Rosenthal contended that he couldn't shop for other bidders because he had reached an "agreement in principle" with Mutual Shares. Having arrived at that stage, Rosenthal argued that legal issues arising in the multibillion-dollar Pennzoil-Texaco case -- in which Pennzoil successfully sued Texaco for interfering with an agreement in principle -- precluded him from entertaining other offers.

SEC officials countered that Rosenthal was mistaken, since he could not have reached any agreement in principle without their approval, and they believed none had been given. The SEC officials also were worried that the price was too low -- selling the shares for about $37 million would fuel additional controversy about the true value of the government's settlement with Boesky.

Rosenthal understood this concern, but felt he had negotiated the best deal possible. "Even if you don't have the magic $100 million settlement, $80 million may be damn good, too," he said later. "I do have some sympathy for the SEC position -- they're getting extraordinary cooperation from Boesky."

The dispute between Rosenthal and the SEC over the negotiations to sell the Cambrian shares was heating up just as the commission got a new chairman, former Northwestern University law professor David Ruder.

On Aug. 20, Ruder ended the bickering, at least temporarily, by issuing a statement that neither the Cambrian nor the Northview shares could be sold because of the "public policy underlying prohibitions against insider trading." Ruder said that because the SEC was unable to disclose confidential information about the Boesky investigation that might affect the value of the shares, the SEC would not sell the stock.

Ruder's decision stunned Mutual Shares, which thought it was on the verge of a deal. "We learned it from the press, not from them," said Philippe Brugere, Mutual's director of foreign investments. "We were very close and they killed it."

Since then, the value of the Cambrian shares has plunged, along with the rest of the stock market. According to Brugere, the stock forfeited by Boesky has a present market value of about $22 million. The most recent net asset value reported by Cambrian in November 1987 was about $37 million, he said.

"The substantial discount {between the market price and the net asset value} is explained by the uncertainty of the legal issues and, more importantly, the timing -- the issues could drag on for years," Brugere said.

In December, Rosenthal arranged for the SEC to dispose of its Northview shares by tendering the stock to the company, though the commission offered no public explanation of its apparent reversal of its earlier policy about selling the Boesky stock. The Boesky investigation was ongoing when the SEC allowed Rosenthal to sell the Northview shares, just as it had been when Ruder stopped the Cambrian sale.

According to SEC Commissioner Ed Fleischman, who emphasized that he was speaking for himself and not the commission, the fact that the Northview shares were being sold to the company, rather than to investors who might sell them on the public market, diminished his concerns about the insider trading issue.

Commissioner Charles Cox, also offering his personal view, said he was comfortable with the deal because Northview was in a position to be assessed any legal liability arising from the Boesky affair. The SEC received about $4.3 million for the Northview shares, more than double the market value of the shares when Boesky turned them over. SEC officials also were said to take comfort from the fact that Northview acquired the stock as part of a broad offer made to all the company's shareholders.

Before the shares were tendered to Northview, however, Rosenthal demanded legal protection against any possible future claims on the stock. Such claims might reflect the view that Boesky did not have the legal right to transfer the stock to the government because of his fraudulent activities. If Boesky were forced into bankruptcy within the next five years, creditors might seek to recover the value of the shares by suing Rosenthal.

By amending his escrow agreement, Rosenthal received indemnification from judgments arising from any such lawsuits, though he will have to pay his own legal fees if any action is brought. But to help protect Rosenthal's position, all of the proceeds from the Northview sale were placed in a special Treasury account where they will be held for the next five years.

Rosenthal has demanded similar protection in the event the more valuable Cambrian shares are sold, meaning that the Treasury is unlikely to have use of its money for some time. Some people involved have suggested that Rosenthal appears more interested in minimizing his own liability than in representing the SEC's interests, but Rosenthal indicated that he must represent the interests of numerous parties in the situation, including himself.

If and when the Cambrian shares are ever sold, the ultimate beneficiary will be the U.S. Treasury. "We hope some day we'll get some money," said George Gould, undersecretary for domestic finance. "There must be a terminal point." Gould added that he thought well of Rosenthal's work as escrow agent.

As for the $50 million in cash, it, too, remains on hold quietly earning interest. Last week, the SEC was scheduled to present Manhattan U.S. District Judge Richard Owen with a plan telling Rosenthal how to distribute the money to injured investors. However, because of continuing negotiations with parties who have filed lawsuits against Boesky, the SEC requested an extension until May. It could take months, or even years, to resolve all the investor claims, even after the SEC submits a distribution plan.

All of which means that Doug Rosenthal's "routine" legal assignment on behalf of the U.S. government is likely to continue for a while.

"It has been terrific," he said enthusias- tically.