A journalist and another man, said to be a photographer, were arrested in Kirk McCambley's house in east Belfast on Wednesday night.
McCambley, who had an affair with Northern Ireland First Minister Peter Robinson's wife Iris when he was 19 and procured a loan to start a business from her, runs a cafe in south Belfast.
Sunday World journalist Hugh Jordan denies that he was arrested, but the PSNI released a statement to the contrary.
“Two men, aged 45 years and 58 years, were arrested by police and were released on street bail pending further inquiries. There are no reports of any injuries,” read the police statement.
However, Jordan told the Belfast Telegraph that he was not cautioned.
“No. I was not arrested. That is not true. I was working on a story, like you are. I have nothing to say on the matter,” he said.
The Castlereagh Borough Council has authorized an inquiry into whether Iris Robinson contravened any local government regulations through her dealings with McCambley