NEW YORK, OCT. 15 -- A former colleague of Michael Milken testified today that the junk bond financier personally initiated a scheme to manipulate a stock price and defraud investors, but the judge in the case called Milken's role "fairly ambiguous."

The testimony from securities trader Peter Gardiner marked the first time in a hearing to determine Milken's sentence that a witness has directly implicated Milken in a crime beyond the six felonies to which he pleaded guilty in April.

Gardiner, who worked under Milken at the Beverly Hills, Calif., office of the now-defunct firm Drexel Burnham Lambert Inc., said that Milken was aware of frequent violations of securities laws by Drexel to earn profits or help clients.

But U.S. District Judge Kimba Wood made clear that she was not entirely convinced by Gardiner, a key witness for the prosecution who has been given immunity by the government in return for his testimony.

In comments to Assistant U.S. Attorney John K. Carroll, Wood disputed the government's assertion that Gardiner had shown conclusively that Milken gave orders that led to the manipulation of the stock price of Wickes Companies Inc. in April 1986.

The judge also challenged an argument, which is central to the prosecution's case, that Milken's admission that he broke the law in some instances in the past makes it reasonable to expect that he used similar, illegal methods in other suspicious transactions. "I can't just assume, because he did something in one context, that he did it here," Wood said of the Wickes case.

Wood asked for the two-week hearing to help her decide how stiff a sentence to give Milken, whose promotion of new uses for risky, high- interest-paying junk bonds revolutionized American finance in the 1980s. Milken faces up to 28 years in prison, after having agreed already to pay a $200 million fine and $400 million in restitution to victims of his swindles.

The defense has appealed for clemency, on grounds that Milken broke the law only in isolated instances and has made important contributions to society as a businessman and philanthropist.

The prosecution has asked for a lengthy prison term, in part because it says that Milken was at the center of a broad conspiracy by Drexel to systematically rig financial markets. The Wickes case is the first of three transactions that the prosecution plans to describe in making its case that Milken committed many crimes beyond the six that he has admitted.

In the Wickes case, Gardiner was supposed to supply crucial evidence showing that Milken was the originator of a scheme described by two government witnesses last week. In it, another Drexel employee working under Milken enlisted former arbitrageur Ivan Boesky to artificially raise the stock price of Wickes, a client of Drexel's.

Gardiner said he was certain that Milken, on the day in question, ordered Drexel traders to find customers to buy Wickes stock and illegally drive up the price.

But Gardiner said he was unable to remember numerous, important details of what occurred that day. In particular, he said he could not recall whether he personally passed on instructions to manipulate Wickes's stock price, as another government witness had testified on Thursday. Gardiner also admitted that he had lied repeatedly under oath in the past to a grand jury.

In a key part of his testimony, Gardiner said that Milken called to him two or three times across the trading room floor on the day of the Wickes stock manipulation, and said, "Peter, Wickes, 6 1/8, 6 1/8."

Asked what that meant, Gardiner said, "I understood him to be telling me to use nominees or agents or clients of ours to make the stock close {higher} at 6 1/8."

Later, prosecutor Carroll said that such a statement by Milken had to be understood as an order to enlist illegal, outside help given Milken's senior position in the trading room and his ways of operating in other, admitted crimes.

But judge Wood said that Milken's actions, as portrayed by Gardiner, were "fairly ambiguous."