The Securities and Exchange Commision yesterday accused New York City Mayor Abraham D. Beame and other city officials of deliberately deceiving public investors about the city's deteriorating finances in 1974 and 1975 so the officials could sell $4 billion in city securities.

The oublic was also itt served according to a lenghty staff report to Congress, by the city's bank and brokerage firm underwriters who reached out to smaller investors to sell the city's notes and bonds just as they stopped buying for their won investment fiduciary accounts when they learned of the deepening crisis.

"The failure to make meaningful disclosure prolonged the agony of the city's fiscal crises" the report said. "delayed major necessary corrective efforts" and "caused undue risks and substantial injury to investors in the city's securities."

"It also impaired the liquidility of a number of the city's major banks which are leading financial institutions in the United States and cast a pall on the capacity of municipalities generally to utilize the nation's securities markets to fund their essential operation."

The 800-page eight-volume document entitled "Transactions in Securities of the City of New York" is th product of 19 months of investigation and preparation, but was released less than two weeks before the Sept. 8 New York mayoral primary election.

With some of the harshest language in the report reserved for Beame who is running for renomination on the report is certain to dominate political debate in coming days.

The landmark report may become the basis for an overhaul in how municipal securities are issued in this country, and could also spell defeat for Beame, who is in the midst of a heated re-election contest.

Became issued a statement calling the SEC report "a hatchet job" and a "shameless vicious political document."

"Never in the history of the SEC has there been a rush to publish such imtemperate charges and conclusions before there was an opportunity to review the allegations and refute their obvious inaccuracies" he said. He said his sworn testimony to the commission which he had earlier made public as well as other evidence "contradict the SEC's conclusions."

The SEC report said: "In sum the mayor and the comtroller Harrison J. Goldin mislead public investors in the offer sale and distribution of billions of dollars of the city's municipal securities from October, 1974, through at least March, 1975."

At another point, it noted that "for eight of the 12 years prior to become mayor. Mr. Beame had been the city comptroller. During all of this time, the city's internal accounting controls had been inadequate. The unsound practices described . . . existed both during his tenure as mayor and as comptroller. A large portion of the federal and state aid and tax receivables carried on the city's books during his tenure as comptroller were ultimately written off as uncollectible."

The report also implied that Mayor Became lied to the SEC inquiry, stating he "knew the city's federal and state aid and real estate tax receivables were overestimated and overstated," but that he "denied any knowledge of these practices in his testimony before the staff."

The report concluded that investors in New York City securities did not receive the protections afforded by the federal securitities laws.

But it stopped short of charging that violations of these laws were committed by either city officials, underwriters, bond-rating agencies or the law firms which acted as bond counsel to the city.

The SEC, after receiving staff recommendations and going over the report, will decide "what commission action or legislative recommendations, if any should follow," according to a statement released with the report.

That leaves the way for possible civil actions by the SEC's Enforcement Division, or a referral ot thee Justice Department for prosecution if the commission decides criminal violations may have been committed.

Although the report does not specifically state what, if any, securities laws were broken, it uses language in a number of places that is similar to the anti-fraud provisions of the Securities Exchange Act of 1934, which say, in part, that it is illegal "to make any untrue statement of a material fact" or omit a material fact when selling securities to the public.

Proving criminal violations under this section would require showing a solid intent to defraud, according to attorneys.

Commission observers indicated yesterday that the SEC probably will use the report as a takeoff point for reform of the way municipal Securities are now issued (they are not subject to the same strict disclosure requirements as corporate securities), but probably will not bring lawsuits against the officials or underwriters involved.

Sen. Harrison A. Williams Jr. (D-N.J.), chairman of the Senate Securities Subcommittee, in response to the report announced yesterday that he will introduce legislation when Congress reconvenes to require full disclosure of pertinent financial information on municipal securities. Senate Banking Committee Chairman William Proxmire (D-Wis.) said he will hold hearings on the same issue this fall.

One volume of the SEC staff report deals quite critically with the role of the city's underwriters, Citibank, Chase Manhattan Bank, Morgan Guaranty Trust Co., Manufacturers Hanover Trust Co., Bankers Trust Co. and Chemical Bank, which number among the largest banks in the country, and Merrill Lynch, Pierce, Fenner & Smith, the country's biggest brokerage firm - which were instrumental in marketing the city's top-heavy debt to individuals, pension funds and other institutions around the country.

The report notes that throughout the October, 1974, to April, 1975, period covered in the report "the underwriters had detailed knowledge of the city's financial crisis and its related problems," and realized that the market for the city's securities had become saturated with their ability to sell more notes thus impaired.

They also realized, the report charges, that "the basic underpinings" of the notes they were selling on behalf of the city "were in serious question." But despite this knowledge "they continued to make representations concerning the safety of the investment and failed to disclose material facts concerning the city's securities."

In fact, as the crisis gained in severaity in early 1975, the underwriters continued to sell the city's notes to the public "as safe and secure investments" while "at the same time, certain of the underwriters were in the process of reducing or eliminating their holdings of the notes," the study charges.

The report is especially critical of a marketing shift that took place in the winter of 1971, when the minimum amount of city notes that could be purchased was reduced from $25,000 to $10,000 in order to reach out to smaller investors at a time when more sophisticated investors were begining to stop buying.

"This had the effect, at least in part, of shifting the risk for financing the city from the city's major banks and large institutional investors to individual investors," it states.

A Nov. 27, 1974, Merrill Lynch document entitled "Opportunity Knocks," which was distributed in connection with a New York City note offering to the firm's salesmen, concluded: "Do your customers and yourself a favor. Bring this new issue to their attention."

Some of the underwriters withheld comment until they had a chance to read the report, but those who did said they did nothing improper, and disputed the study's criticisms.

"It shouldn't be overlooked that as of today the city notes held by the public have been paid, were changed for currently marketable Municipal Assistance Corp. securities, or are scheduled for payment within six months," a spokesman for Morgan Guaranty said.

"We feel that full and thorough examination of the facts will show Merrill Lynch's performances and practices met the highest professional standards," the brokerage firm said in its statement.

The SEC report pointed out that the underwriters were "subject to intense pressure" from city's debt, and that the banks' own investments in city bonds and notes exceeded $1 billion, or 20 per cent of their combined equity, so that any effort to blow the whistle on the city's finances "would have seriously affected the banks."

But "whatever reasons led the underwriters to market the city's securities without adequate disclosure, their conduct cannot be justified under the federal securities laws," it added.

Beame's opponents in the upcoming Democratic primary immediately jumped on the implications contained in the SEC staff report.

"The cover-up, collusion and conspiracy by Beame and the big commercial banks has betrayed the people of New York," said former Rep. Bella Abzug, considered a lending challenger to Beame.

Democratic Rep. Herman Badillo (D-N.Y.) said Beame's license as a certified public accountant should be revoked. "In addition, I call upon the district attorney to convene a grand jury, and I predict a grand jury will indict for fraud and conspiracy," he said.

One candidate, Mario Cuomo, New York secretary of state, however expressed sympathy. "It's a sad, sad day, especially for Beame," said Cuomo. "I feel for him. He's a man who dedicated most of his life to the city. It's unfortunate he is humiliated at this point in his life."