When former Securities and Exchange Commission enforcement chief Gary G. Lynch was asked what his reaction was to the two-month jail sentence given earlier this month to Martin A. Siegel for insider trading, there was a long, strained silence.

Siegel is widely known as the investment banker at Kidder, Peabody & Co. who leaked inside information to speculator Ivan F. Boesky in exchange for $700,000 cash in briefcases. He faced a maximum of 10 years in prison. .

When Lynch finally spoke about Siegel's sentence, he was walking on eggshells.

"I think it was a difficult weighing process for the court," he said. "I wouldn't second-guess the decision. It's in the government's interest for cooperators to be rewarded. But there has to be a balance between the cooperation and the egregiousness of the action. ... The violations themselves were egregious as far as insider trading goes."

Legal experts are debating the message that a two-month sentence sends on white-collar crime. But Judge Robert Ward, who imposed the sentence, stressed the need to reward Siegel for cooperating with the government in its investigations.

The Manhattan U.S. attorney's office wrote a lengthy sentencing memo praising Siegel's help over the last three years. "But for Siegel's cooperation, neither the U.S. attorney's office nor the SEC would know anything at all of the conspiracy that existed between him and Robert M. Freeman," the memo said.

Freeman, a former partner at Goldman, Sachs & Co., swapped inside information about corporate takeovers with Siegel, the government charged. Freeman received a sentence of four months in prison.

"When Freeman got four months, that put the cap on what the judge could give Siegel," said Bruce A. Baird, former chief of the securities and commodities fraud unit in the U.S. attorney's office in New York. "You don't want to have a situation in which the person who gave them Freeman gets a tougher sentence than he did. ... You want to send a message to people that they should cooperate."

Once one of Wall Street's brightest stars, Siegel was at the top of his profession and therefore privy to the kind of inside information that speculators such as Boesky needed to make a killing. Boesky received a three-year prison term and paid the government $100 million.

The sentences in the insider-trading imbroglio have been wildly disparate, with some getting years while others received months in prison. Still others got by with probation. It's a sort of Russian roulette in which the gun chamber may be empty or loaded depending on which judge and which court the guilty party winds up in.

"The sentences are all over the map," said Robert B. McCaw, one of Boesky's lawyers. "They just don't compute. {Siegel's} two-month sentence for securities fraud, tax evasion and taking suitcases full of money is a pretty light sentencing."

In addition to the prison term, Siegel was sentenced to five years probation. He previously paid the government $9 million in cash and securities to settle civil charges brought by the SEC.

However, by comparison, former Drexel Burnham Lambert Inc. trading assistant Lisa Jones was sentenced Friday to 10 months in prison for lying to the government during its investigation of the firm.

According to McCaw, Judge Ward gave "extraordinary, truly extraordinary weight to Siegel's cooperation," in sentencing him. Ward said that had he sentenced Siegel on misdeeds alone, he would have given him 18 months to two years.

Siegel's attorney, Jed S. Rakoff, called the two-month sentence "well justified."

"I find it extraordinary that because there is a public perception of Siegel as receiving cash in briefcases, people ignore other facts," Rakoff said. "To suggest that ... he is anywhere near the person Boesky is, is not reality."

To protect his assets, Siegel headed to Florida around the time his legal troubles began, taking advantage of the generous legal protection the state gives to homeowners, sources said. He built a new home and bought adjoining beachfront property, all of which is protected under Florida law.

Meanwhile, his influence was felt in Manhattan, as he answered questions about Wall Street's secrets. He met with government attorneys on at least 19 occasions in 1987, and met numerous other times with SEC and government investigators, according to the sentencing memo.

In addition to Freeman's conviction, other consequences of Siegel's cooperation were SEC insider trading charges against Kidder Peabody and charges against six other individuals who were convicted at trial.

Yet, cooperation aside, lawyers careful not to offend the judge with their comments were quietly talking behind the scenes about the two month sentence. Said Joseph Grundfest, a former SEC commissioner and now a professor of law at Stanford University: "I haven't heard anybody say anything good about it."