Jamie Securities is also a large arbitrage firm.

Leonard DeStefano, 34, a former trader at Mr. Mulheren's firm, Jamie Securities, is charged with two counts of conspiracy and record-keeping violations.

In the 1980's he founded Jamie Securities, his own arbitrage firm, and hit his stride as one of the top traders during that period.

As has been reported, they gave information about possibly illegal dealings involving a firm, Jamie Securities, run by Mr. Mulheren.

Jamie Securities was able to double that capital base with borrowed funds that it invested in securities of companies involved in takeovers or restructurings.

Mr. Mulheren, general partner and head of Jamie Securities, was regarded in the investment community as intense, mercurial and unorthodox.

More subpoenas have been sent to Jamie Securities' present and former employees.

In addition, the sources said, investigators have been scrutinizing transactions between Mr. Boesky's firm and Jamie Securities, another firm that specializes in investing in takeover stocks.

Mr. Mulheren, a prominent arbitrager who heads Jamie Securities, was arrested Thursday on charges of illegal weapons possession and for threatening witnesses against him in a securities investigation.

A few years ago, he started Jamie Securities, named after one of his children.