Mulheren Denies Illegal Dealings With Boesky : Securities: The gregarious former stock speculator testifies that he never ‘parked’ stock and had no knowledge of inside trading.

Stock speculator John A. Mulheren Jr. took the witness stand in his own defense Wednesday and squarely denied that he had ever made illegal stock trades in the mid-1980s with admitted inside trader Ivan F. Boesky.

Mulheren also said he didn’t know that Boesky was receiving and trading on inside information during the time the two men had a business relationship.

Under questioning by his own lawyer, Thomas Puccio, Mulheren said he had never agreed to hold stock illicitly for Boesky and said he never accepted an arrangement under which Boesky would have protected him from losses. Mulheren is on trial in federal court on 41 felony counts of illegally “parking” stock, stock market manipulation and conspiracy.

Asked about one transaction, in which he is accused of secretly holding the stock of Storer Communications for Boesky, the defendant said he had specifically turned down an offer by Boesky’s chief trader, Michael Davidoff, to protect him from any losses while holding the stock.

Mulheren, 40, said he told Davidoff in a telephone conversation: “I told you before that I don’t do those kinds of transactions. I’m a big boy and I take the risk myself.”

Boesky and Davidoff both testified earlier in the trial as prosecution witnesses. They claimed that they had such agreements with Mulheren.

The defense’s decision to put Mulheren on the stand came as a surprise to people closely following the trial. Defendants aren’t required to testify. Lawyers observing the case had said they thought testimony by Mulheren was unlikely, in part because of his history of mental illness. He is a diagnosed manic-depressive who was once arrested on charges of leaving his home with a loaded assault rifle, allegedly intending to shoot Boesky.

But Puccio claimed during a break in the trial Wednesday that “we always planned to put him on” the stand.

Mulheren gave a colorful description of how he was first introduced to Boesky in 1975. He said he met Boesky at a dinner arranged by a mutual Wall Street acquaintance in a fashionable restaurant on Manhattan’s Upper West Side. He said Boesky looked at the menu and then ordered “six to eight” entrees for himself. “He ordered most of the entrees on the menu, then picked what he wanted to eat after he ordered,” Mulheren said.

Throughout the weeks of testimony so far, the tall, beefy Mulheren has been a gregarious presence at the defense table, talking freely and joking with reporters, family members and friends during recesses in the trial. And on the day he took the stand for the first time, he stuck to his regimen of dressing informally.

Mulheren wore a striped button-down shirt with an open collar, dark slacks and boat shoes. He wore no socks. He answered questions in a loud, firm voice, in the manner of someone who had been chomping at the bit for weeks to tell his side of the story. But at times he seemed nervous and glanced frequently at his tangerine-colored wristwatch.

In the short time that he was on the stand before the trial adjourned for the day, Mulheren testified mainly about the “parking” charges against him. Parking involves sham trades of securities in which someone pretends to buy stock with a secret agreement to sell it back later without risk of loss. Mulheren is accused of illegally parking stock for Boesky to help him evade taxes and regulations governing securities firms.

Mulheren admitted that he had done Boesky “a favor” by agreeing to buy 330,000 shares of Unocal stock in 1985. But he denied that it was to help Boesky avoid disclosure requirements and said he never agreed to an arrangement in which Boesky would reimburse him for the losses he eventually suffered when the stock ultimately was sold. The government charges that Mulheren had secretly agreed to sell the stock back to Boesky, but Boesky allegedly told him to sell it on the open market instead after it declined in price.

Mulheren is due to resume his testimony today. After Puccio finishes, Mulheren faces a potentially grueling cross-examination by prosecutors. Lawyers said they expect testimony in the trial to end next week. Character witnesses for Mulheren so far have included Samuel Belzberg, a member of the family noted for corporate raiding in the 1980s, and Alan C. “Ace” Greenberg, chairman and chief executive of the brokerage firm Bear, Stearns & Co.

A former trader at Mulheren’s firm, Leonard L. DeStefano, is also a defendant in the case.