NEW YORK, JULY 10 -- Former Wall Street trader John A. Mulheren Jr. was convicted today of conspiring to manipulate the price of Gulf & Western Inc. stock, making him the first person to be convicted based on the weight of courtroom testimony by notorious stock trader Ivan F. Boesky.

However, after seven days of deliberations, a federal jury was deadlocked and still deliberating on 26 other counts of securities and mail fraud and record-keeping violations. Those counts relate to the charge that Mulheren secretly held large blocks of other stocks to help Boesky evade taxes and federal securities disclosure laws.

As the verdict was read in U.S. District Court, Mulheren stared ahead impassively, while his wife started to cry softly. "Now don't get upset," he told her.

Mulheren, dressed in a pink sportshirt and his trademark boat shoes with no socks, told his family minutes later, "I just can't believe it."

Mulheren, 41, faces a maximum of five years in prison and $250,000 in fines for each of the four counts he was convicted on. The remaining counts each carry the same penalties.

Both Mulheren and his attorney, Thomas P. Puccio, declined to comment until a full verdict is delivered.

The jury acquitted Leonard DeStefano, 34, a former trader at Mulheren's now-defunct firm, Jamie Securities, on two counts of conspiracy and keeping false records.

Previous information supplied to prosecutors by Boesky has led to guilty pleas and the convictions of several well-known Wall Street figures, including "junk bond king" Michael Milken. But the case against Mulheren marked the first time that Boesky, once one of Mulheren's closest friends and advisers, appeared in court since agreeing in November 1986 to cooperate with investigators in exchange for leniency.

Boesky, 53, pleaded guilty to one count of conspiracy in charges stemming from the landmark insider trading scandals of 1987. He was released from a Brooklyn halfway house last April after serving two years of a three-year sentence and paying $100 million in penalties.

Under cross-examination during Mulheren's trial, Boesky admitted that he had deducted $50 million of the penalty from his 1986 personal income taxes as a capital expenditure.

Boesky and other witnesses testified that Mulheren manipulated the stock price of Gulf & Western by buying 75,000 shares in an attempt to drive up the price of the shares so that Boesky could sell his 3.4 million shares back to the company at a higher price.

Boesky also told the court that in 1985 Mulheren agreed to a "stock parking" scheme, in which Mulheren would buy $10 million worth of Unocal Corp. stock from Boesky on the understanding that Mulheren would sell it back to him one month later at the same price. The scheme was designed to save Boesky money in taxes, prosecutors said, in exchange for which Boesky supplied Mulheren with information about pending corporate takeovers.

Defense attorney Puccio tried to destroy Boesky's credibility by portraying him as a "king of greed" who provided evidence against his former friends to save himself. Under Puccio's questioning, Boesky admitted that he had lied several times under oath, once to the Securities and Exchange Commission, about Mulheren.

Puccio also forced Boesky to admit that he had repeatedly signed false income tax returns.

At times during the trial, Mulheren appeared relaxed and unconcerned, dozing during some of Boesky's testimony and telling reporters the trial was "a joke."

Mulheren was arrested in February 1988, when police intercepted him as he left his Rumson, N.J., mansion carrying an Israeli-made Galil rifle and army fatigues stuffed in a gym bag. Police said then that Mulheren told them he wanted to kill Boesky and Michael Davidoff, Boesky's top trader, because he had heard that the two had implicated Mulheren in securities crimes.

Mulheren was jailed for 20 days, and spent more than a month in a psychiatric hospital.

His doctors said he was a manic-depressive who lost control because he had stopped taking the drug lithium prescribed to treat the disorder.

Mulheren was released on $20 million bond, and authorities later agreed to drop the charges stemming from the incident.