MIAMI, OCT. 26 -- A longtime speculator whose fortunes had been battered in last week's stock market crash walked into his broker's office this morning and opened fire, killing one vice president and seriously wounding another before killing himself, police said.

Witnesses said Arthur Kane, 53, entered the Merrill Lynch brokerage office in The Falls shopping center, where he had been a well-known customer for years, carrying a briefcase and asking to see his broker and the office manager. He "walked into the office with two of the brokers," said Bruce Anderson, a bystander who spoke with brokerage employes after the 11:14 a.m. shooting. Then he "opened the briefcase, took out a gun and shot the two of them and himself."

The tragedy came in the midst of a drop in world stock markets and one week after the Dow Jones industrial average plummeted a record 508 points to 1738.74 before regaining some ground in fits and starts. When Kane walked into the office this morning, the average had dropped 109 points to 1840; it closed at 1793.93, down 156.83.

Metro-Dade County police spokesman Bill Johnson identified the victims as Merrill Lynch vice presidents Jose Argilagos, 51, who was killed, and Kane's broker, Lloyd Kolokoff, 38, who was taken to Baptist Hospital by helicopter. Doctors said Kolokoff, who was in critical but stable condition after two hours of exploratory surgery, would be paralyzed from the waist down. The bullet hit his spinal cord, they said.

Aaron Perry, a stockbroker at Profile Investments and friend of several Merrill Lynch employes, said Kane was one of that branch's "biggest customers. He used to hang out at the manager's office." He said Kane, like many big investors, had borrowed heavily from the brokerage firm -- a practice called "buying on margin" -- to purchase securities.

Perry said Kane had received a "margin call," or demand for more money because his stock had decreased in value. Kane had made an appointment with Kolokoff to discuss it this morning.

"He went into a margin situation; he had all these margin calls," said Perry. "He just flipped out. He was in a margin situation where he just got wiped out. It's scary."

Those who worked for or did business with Merrill Lynch immediately recognized Kane's name.

"For years, Mr. Kane has been one of the office's best-known customers," said Marie Ros, a former junior broker who worked for four years at the branch before leaving several months ago. "He was a regular. He used to come in on almost a daily basis. Everybody knew him."

His passion for the market was equally legendary around the office, Ros said. "He knew the market," she said. "He understood it perfectly. He knew what he was doing."

Friends described Argilagos as a friendly, accessible broker.

"He was a very fine man," said Aaron Jaffe, 79, who has traded stocks several years at Merrill Lynch. "He was affable. He shook hands with everybody when they came in. He's the last person that you would wish to shoot. I'd guess the man who did it must have been despondent.

"When you lose a lot of money," Jaffe said, "you lose your reason."

In New York, Merrill Lynch Chairman William A. Schreyer and President Daniel Tully said: "We are deeply shocked and saddened to learn of this incident, and we extend our heartfelt sympathies to all the families affected by this event." Kane left a wife, Judith, and three daughters.

Frank Miller, a former neighbor, described Kane as a private investor who worked on his own. "He made his living as a speculator," Miller said. The market plunge would have "impacted him very heavily."

Allen Pierce, a friend of Kolokoff, said: "I told him to be careful. You have people's emotions running very high now. He seemed very busy, trying to get his customers squared away."