NEWARK, N.J., Dec 14 (Reuters) - An attorney who worked for some of the top merger-and-acquisition law firms in the country pleaded guilty on Wednesday to stealing merger secrets from his employers and using the information in a massive insider-trading scheme.

Matthew Kluger, 50, of Oakton, Virginia, admitted that he was part of a scam that the government said spanned 17 years and reaped more than $37 million in profits by trading on information Kluger provided.

Kluger appeared before U.S. District Judge Katharine Hayden in Newark and pleaded guilty to one count each of conspiracy to commit securities fraud, securities fraud, conspiracy to commit money laundering and obstruction of justice.

In April, the U.S. Attorney's Office for the District of New Jersey accused Kluger and two others of collaborating to trade on the information Kluger culled from the law firms. Garrett Bauer, 44, a stock trader, and Kenneth Robinson, 45, a mortgage broker, have already pleaded guilty for their roles in the scam.

Over the years, Kluger worked at major law firms including Cravath Swaine & Moore; Skadden, Arps, Slate, Meagher & Flom; Fried, Frank, Harris, Shriver & Jacobson; and Wilson Sonsini Goodrich & Rosati. While at those firms, he regularly stole nonpublic information on pending corporate mergers and acquisitions on which the firms were working, the government said, and delivered the information to Robinson.

"Not only did Matthew Kluger defraud the investing public, he betrayed the colleagues and clients who depended on his confidentiality in some of the biggest deals of the last decade," Paul Fishman, U.S. Attorney for the District of New Jersey, said in a statement. "In order to be confident in our markets, investors must have comfort that those with inside information won't abuse positions of trust for personal gain."

CO-DEFENDANTS PLEADED GUILTY

As part of the scheme described by prosecutors, Kluger would pass the merger information to Robinson, who in turn shared it with Bauer. Bauer would use the tips to make trades for all three men.

On Dec. 8, Bauer pleaded guilty to the same charges as Kluger, admitting that as part of the scheme he traded ahead of more than 30 different corporate transactions. He took the lion's share of the proceeds and used $7 million of it to buy two properties, a $6.65-million condominium on Manhattan's Upper East Side and an $875,000 home in Boca Raton, Florida. He is scheduled to be sentenced on March 13, 2012.

Robinson pleaded guilty on April 11 to one count of conspiracy to commit securities fraud and two counts of securities fraud. He is awaiting sentencing.

Assistant U.S. Attorney Judith Germano told Hayden that Kluger's plea agreement does not include a stipulation on the amount of prison time he could face. Kluger will also have to forfeit $415,000 in proceeds from recent transactions derived from the scheme, Germano said.

'HE DID IT FOR SELFISH REASONS'

After court, Kluger's defense attorney, Alan Zegas, said his client has been cooperating with authorities since his arrest.

"He did it for selfish reasons that he recognizes and feels terribly about," Zegas said.

While Kluger admitted his role in the conspiracy, Zegas added, he only learned after his arrest that Bauer had been trading "far in excess of what had been agreed upon."

"He would not have agreed to what Mr. Bauer was doing," Zegas said. "This is not a stipulated plea where the defendant agrees with the government on the amount lost."

Kluger is currently free on $1 million bail and is subject to home confinement and electronic monitoring.

His sentencing is scheduled for April 9, 2012, when he faces up to 20 years each on the charges of securities fraud, conspiracy to commit money laundering and obstruction of justice. The securities fraud conspiracy charge carries a maximum penalty of up to five years in prison.

The case is United States v. Bauer et al, U.S. District Court, District of New Jersey, 11-03536.

For the prosecution: Judith Germano and Matthew Beck.

For Kluger: Alan Zegas of the Law Offices of Alan Zegas.

(Reporting by Jennifer Golson)

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