CENTRAL ISLIP, N.Y. – Moments before entering a guilty plea to a securities fraud charge in federal court yesterday, Peter Paul began describing his swift fall from the money-drenched dotcom era, the bleak breakfasts in the Brazilian penal system, and his own legal battle against Senator Clinton and her campaign fund-raisers.

Paul, an Internet speculator and potential key witness in the government’s case against Mrs. Clinton’s former national finance chairman, admitted in court to a “pump and dump” scheme in which he manipulated the stock price of an Internet company he started with the legendary comic book publisher Stan Lee. Paul said he secretly borrowed money from banks using his overpriced stock as collateral, then illegally sold the shares as an insider without reporting the transactions to authorities. Prosecutors said Mr. Lee, 81, is not suspected of any wrongdoing.

Paul, who was originally indicted on June 8, 2001, claimed that his political association with the Clintons made him a target of the Justice Department. He was arrested a month later in Brazil, where he spent two years in prison pending extradition proceedings.

“How do I feel? Peachy keen,” Paul joked to The New York Sun in an interview yesterday. “I’m about to plead guilty to stock fraud. Couldn’t be better.”

In total, prosecutors estimated Paul’s scheme, which he carried out between August 1999 and December 2000, resulted in an approximate $25 million loss to banks and the investing public. Paul also claimed he lost an estimated $2 million in the trading debacle.

Under yesterday’s plea, Paul faces up to 10 years in federal prison, a maximum $5 million fine, and other financial penalties. During court proceedings, Paul also said yesterday that he suffered from bipolar disorder and was taking the anti-depressant medication Zoloft.

The judge presiding over the case, Leonard Wexler, postponed sentencing until reviewing Paul’s probation report and remanded him to house arrest in his Asheville, N.C., apartment complex. Judge Wexler also agreed to a proviso in which Paul would be allowed to leave his apartment to use the complex’s gym facilities.

The guilty plea is the latest development in a larger unfolding legal drama involving the campaign finance disclosures of Mrs. Clinton, including federal charges filed against David Rosen, the senator’s finance chairman.

In January, federal prosecutors unsealed an indictment in which Mr. Rosen was charged with failing to report hundreds of thousands of dollars in in-kind contributions to the Federal Election Commission. The reports pertained to a star-studded 2000 Clinton fund-raiser that Paul helped organize and bankroll.

While Paul was listed on campaign records as having donated $2,000 to the campaign, he claims to have donated $1.8 million. Mrs. Clinton’s Senate campaign officially returned Paul’s $2,000 donation, but the businessman claimed Mr. Rosen and other campaign staffers approached him shortly after, looking to drum up additional donations.

The money he donated to Mrs. Clinton’s campaign, Paul said yesterday, came in part from the illegal stock trades he made as co-chairman of Stan Lee Media. He alleged that the contributions were part of a “down payment,” after which President Clinton would take a job at Stan Lee when he left the White House.

Paul was convicted of trafficking cocaine in 1979 and participating in a bizarre coffee-trading scheme that defrauded the Cuban government.

While many have speculated that Paul’s guilty plea came as a deal with prosecutors in exchange for his testimony against Mr. Rosen, Paul said yesterday that he chose to enter the guilty plea on his own accord. He said was eager to testify against Mr. Rosen at trial, and potentially against Mr. and Mrs. Clinton, both of whom he is suing in a civil action.

“I can’t wait to see David Rosen’s face in court,” Paul said, calling on Mrs. Clinton to address the improper campaign disclosures. “I have come to take responsibility for my actions and put myself at the mercy of the court. Senator Clinton has not.”

A spokeswoman for Mrs. Clinton did not return calls yesterday. An attorney for Mr. Rosen, Paul Sandler, declined to discuss the upcoming trial or Paul’s viability as a potential witness.

An attorney representing the Clintons, David Kendall, also did not return calls. In previous interviews with the Sun, Mr. Kendall has said Mrs. Clinton’s campaign transactions were “proper,” but he declined to discuss the specific charges.