SEC Faces Unusual Obstacles in Parretti Probe : * Securities: Geography and Italy’s more tolerant legal views may frustrate U.S. regulators.

As it investigates the tangled transactions of Giancarlo Parretti’s former entertainment empire, the Securities and Exchange Commission faces the formidable obstacles of geography and differing cultural values.

Financial reports newly filed by MGM and the studio’s parent, Pathe Communications, detail a number of transactions that could be drawing the SEC’s scrutiny--from deals with other Parretti companies to complex fund transfers.

And sources familiar with the SEC investigation--confirmed by MGM earlier this month--said the agency continues to issue more subpoenas for documents.

Yet whatever Parretti’s culpability--he denies any wrongdoing--legal experts agree that it will not be simple for the SEC to take action against a man living half a world away. Parretti returned to Rome last year as he lost his grip on the two entertainment companies that he had acquired in 1989 and 1990.

“Italy is one of the countries that is particularly difficult,” said Harvey L. Pitt, a securities lawyer based in New York who formerly was general counsel of the SEC.

At the core of the investigators’ problem, Pitt said, is Italy’s comparatively tolerant approach to securities law. Financial conduct that in the United States might be viewed harshly is regarded in Italy “definitely not as seriously,” Pitt said.

The SEC has a policy of neither confirming nor denying the existence of investigations. Without referring to Parretti, MGM or Pathe, officials said the agency does have the ability to serve subpoenas and elicit testimony if a witness or an investigative target resides in Italy.

“These cases are much more time-consuming, obviously, because of the delays involved in international cooperation,” said Thomas C. Newkirk, the SEC’s chief litigation counsel in Washington. “But they’re doable.”

In contrast to agencies that enforce criminal-law statutes, Newkirk said it does not matter that the SEC is unable to extradite a suspect from a foreign country.

“We don’t need the body,” said Newkirk. “We can get jurisdiction over somebody”--including control of a person’s assets--”without having his carcass in the U.S.”

The SEC, he noted, has a collaborative agreement with its counterpart in Italy, the Commissione Nazionale per le Societa e la Borsa.

Parretti confirmed through a spokesman this week that the SEC has tried, unsuccessfully, to contact him. “They have sought to reach him, back in December, through his attorney,” the spokesman in Los Angeles said.

“But they (the SEC) have not since then tried to reach him directly. And he will, of course, cooperate fully with the SEC if he is contacted.”

Parretti has said he could have rectified the financial problems of MGM and Pathe if he had not been forced from operational control. Parretti’s ouster was directed by Credit Lyonnais, the French bank that is the studio’s major creditor and, now, effectively, its owner.

As for the costly transactions during his reign at MGM-Pathe that the studio disclosed last week to shareholders and the SEC, Parretti’s spokesman added: “He (Parretti) noted that all transactions completed by Pathe were properly recorded and approved by Pathe’s accountants, KPMG-Peat Marwick.”

Examples of the transactions disclosed by MGM-Pathe last week that could be drawing the SEC’s scrutiny include:

* A disputed $50-million loan arrangement entered into in November, 1990, by Pathe, a Luxembourg bank called Banca Popolare di Novara, Credit Lyonnais and two other Parretti-affiliated companies. At one point, the money was deposited in a Swiss account controlled by Banca Popolare.

* A purchase in April, 1991, by MGM-Pathe of $22 million of stock of another Parretti-controlled company, Pathe-Italia. The latter is not a subsidiary or otherwise affiliated with MGM-Pathe, whose spokesman said the stock is worthless because Pathe-Italia has fallen into involuntary bankruptcy in Italy. The deal granted Pathe-Italia--at no charge--the right to use MGM’s roaring lion trademark on European television for 30 years.

* Payouts during 1991 totaling $2.9 million--described as “unsecured advances”--to Interfly Inc., an air travel services company held in part by Parretti.