Wall St. Merger Specialist Pleads Guilty in Stock Plot

A Wall Street merger specialist believed to be a key informant in the government’s insider trading investigation tearfully pleaded guilty today to illegal stock trading conspiracy and tax evasion.

In addition to entering the pleas in U.S. District Court in Manhattan, Martin A. Siegel, who was an executive with Drexel Burnham Lambert Inc., settled a non-criminal complaint alleging that he engaged in insider trading with stock speculator Ivan F. Boesky.

Without admitting wrongdoing, Siegel settled the Securities and Exchange Commission complaint by agreeing to relinquish $4.3 million, the SEC said in a prepared statement. It alleged that Boesky paid Siegel $700,000 for inside information from 1982 to 1984.

Siegel, 38, who said he resigned as a managing director of Drexel today, is cooperating with investigators in the criminal case, his lawyer, Jed Rakoff, told District Judge Robert A. Ward. He faces up to 10 years in prison and a $260,000 fine on the conspiracy and tax charges.

Siegel is believed to be the informant prosecutors said provided information that led to to insider trading charges Thursday against three high-level executives from two Wall Street investment firms--Richard Wigton, a vice president at Kidder, Peabody & Co.; Timothy L. Tabor, a former Kidder vice president, and Robert M. Freeman, a partner at Goldman, Sachs & Co.

The three were accused of using secret information to make millions of dollars in illegal profits for Kidder. (Story on Page 18.)

Siegel was head of mergers and acquisitions at Kidder during the alleged illegal trading, and Wigton and Tabor worked for him.

In admitting the conspiracy charge, Siegel said: “I swapped material, non-public information with Robert Freeman of Goldman Sachs for the mutual benefit of Goldman, Sachs and Kidder, Peabody.”