A defense lawyer for a technology consultant who faces insider trading charges tried to shatter the credibility of a key prosecution witness, citing his disoriented romp on a San Francisco street after a bad drug experience.

Noah Freeman, a former portfolio manager at hedge fund SAC Capital Advisors, has testified that he received perfect stock tips from consultant Winifred Jiau based on inside information.

Freeman has pleaded guilty in the case and is a key cooperating witness against Jiau.

But Jiau's lawyer David Luttinger tried on Tuesday to poke holes in Freeman's character in front of the Manhattan federal jury hearing the case.

Prosecutors say Jiau, 43, passed inside tips on chipmakers Marvell Technology Group Ltd and Nvidia Corp from 2006 to 2008 to Freeman and others.

Under cross-examination, Freeman elaborated on his earlier admission to the terrible experience of having once used hallucinogenic mushrooms in the spring of 2009, despite a pretty strict drug policy at SAC, where his contract guaranteed him at least $1.3 million. It is unclear whether he was referring to annual pay.

Freeman also did not question Luttinger's statement that after having consumed mushrooms, he was found running around in his underwear on a San Francisco street, until he was picked up by an ambulance and taken to a hospital.

He said he did not give his name at the time. I was worried that I was going to get in trouble with SAC, he said.

MULTIPLE INSIDE TRADES

In his testimony, Freeman also said he conducted maybe a little more than a dozen insider trades while employed at the hedge fund Sonar Capital Management from 2005 to 2008, and perhaps a half a dozen such trades at SAC, the fund where he worked from 2008 to early 2010.

Freeman is a main cooperating witness for the government against Jiau, a former Taiwan Semiconductor Manufacturing Co <2330.TW> employee and consultant at expert networking firm Primary Global Research LLC. Expert networking firms match industry experts with money managers, and are a focus of the government's broad insider trading probe.

Jiau has pleaded not guilty. She faces as much as 25 years in prison if convicted.

Freeman on Tuesday also said several dozen times he could not recall the origin or nature of tips that Jiau might have given.

So what we're going on here is your memory? Luttinger once asked, referring to Nvidia trades that Freeman said he made for Sonar in 2007 based on Jiau's tips.

Correct, Freeman responded.

Jiau's lawyer, during the cross-examination, also suggested that Freeman may have paid for female escorts for people who fed him potential trading tips.

Freeman testified that he once paid a couple of thousand dollars to a Taiwan karaoke bar that let two dining companions take a woman home, as Luttinger put it.

Freeman said he picked up a large bill, but that he did not recall exactly what it covered.

The portfolio manager's guilty plea in February was the first by a former SAC employee. He provided evidence that led to guilty pleas by his former close friends Donald Longueuil, who once worked at SAC, and Samir Barai of Barai Capital Management.

The respective principals of SAC and Sonar, Steven A. Cohen and Neil Druker, have not been accused of wrongdoing.

The case is U.S. vs. Jiau, U.S. District Court, Southern District of New York, No. 11-cr-00161.

(Reporting by Jonathan Stempel; Editing by Tim Dobbyn)

Insider trading