FREEHOLD, N.J., FEB. 19 -- John A. Mulheren, a prominent Wall Street trader who has been under investigation for possible illegal dealings with former stock speculator Ivan F. Boesky, was arrested Thursday night near his home carrying a loaded Israeli-made assault rifle with which police said he planned to shoot Boesky.
Mulheren was arrested soon after he left his home by car, with the rifle in a bag on the back seat.
Earlier in the evening, police had been summoned to Mulheren's New Jersey estate by a call from Mulheren's wife, where they seized a 9mm pistol, a .357 Magnum and a shotgun. Authorities said Mulheren was carrying the weapons but could not be arrested because they were licensed and he was on his own property. But police continued to watch his house, and pulled him over when he drove away later.
Sources have said that Boesky and Michael Davidoff, a former Boesky stock trader, are among those who have provided federal authorities with information about possibly illegal stock dealings involving the 38-year-old Mulheren.
Police said that at the time of his arrest, Mulheren was upset and said he intended to use his rifle against both Boesky and Davidoff. He said he had been at Davidoff's home that morning but that Davidoff was not there, police said.
Although Assistant Monmouth County Prosecutor Alton D. Kenney said Mulheren told police that he intended to go after the two men, he apparently never delivered any direct threats. "We have no evidence that Mr. Mulheren intended any harm to anybody and regret that he is in this situation," said Paul Rooney, Davidoff's attorney.
Mulheren appeared before a county criminal judge in Freehold today on charges of unlawful possession of a loaded weapon, and was ordered held on $17,500 bail. If he posts bail and is released, he will be turned over immediately to federal authorities to face charges in Manhattan of threatening a witness in a federal probe, according to Bruce Baird, head of the securities fraud unit for the U.S. attorney in the Southern District of New York.
The latest and most bizarre twist in Wall Street's continuing scandal involves a man who has managed hundreds of millions of dollars for himself and other prominent investors, including members of the wealthy Belzberg and Tisch families.
Mulheren, who is about 6-foot-2, has a reputation as volatile, but he also has been widely regarded as one of Wall Street's most brilliant and unconventional figures.
Mulheren was described by friend and business associates as an extraordinarily charitable man who suffered from severe mental strain, exacerbated by pressure from the 15-month securities probe. "He is in the process of seeking required medical assistance," said Mulheren's attorney, Otto Obermaier.
From his birth into a middle-class family in the Bronx, Mulheren rose to head privately held Jamie Securities, a New York-based firm that specialized in trading stocks of companies involved in corporate takeovers and other "arbitrage" opportunities. He was regarded as one of the Street's most prolific and successful traders.
Throughout his years on Wall Street and his stints as a trader at firms including Merrill Lynch, Mulheren cultivated a reputation as an antiestablishment figure. For example, he shunned traditional Wall Street garb in favor of slacks and an open-neck shirt at the office.
Mulheren's estate in Rumson, N.J. is near the home of singer Bruce Springsteen, and the two are said to be friends.
As previously reported, the Securities and Exchange Commission has issued subpoenas to Jamie Securities and Mulheren to determine if there was anything improper about a payment of about $500,000 that Jamie made to Boesky. Federal authorities have been trying to determine if the payment was made in connection with illegal "stock parking," in which Boesky and Mulheren may have helped one another conceal who was the true owner of shares.
Boesky and Mulheren had a close personal relationship before Boesky's fall in November 1986, when he agreed to plead guilty to criminal charges. Until then, Mulheren served as the trustee for a trust that Boesky established for his children. He then resigned as trustee, saying he was stunned by the disclosure of Boesky's crimes and his cooperation with federal authorities. But friends said he never recovered from the shock.