Michael C. York for The New York TimesWinifred Jiau insisted on gifts of lobster, Noah Freeman testified.
8:07 p.m. | Updated
Winifred Jiau, a Silicon Valley technology worker, was known to most of her peers as Winnie.
But across the country on Wall Street, three young, successful hedge fund traders nicknamed her “the Poohster,” a not-so-subtle reference to the fictional bear.
On Monday, one of those hedge fund traders, Noah Freeman, testified that “the Poohster” provided him and two friends with “absolutely perfect” information about coming earnings announcements from technology companies.
Ms. Jiau is on trial in Federal District Court in Manhattan on charges of passing secret corporate information to Mr. Freeman and others. She is a former consultant at Primary Global Research, a so-called expert network firm that connects Wall Street traders to industry experts, including public company employees. These firms are a focus of the government’s vast investigation into insider trading at hedge funds.
If convicted, Ms. Jiau faces up to 25 years in prison.
Mr. Freeman is a main cooperating witness in the case against Ms. Jiau. He not only gave the government information about Ms. Jiau that led to her arrest, but also provided the authorities with evidence that led to the conviction of his two fellow traders and former friends, Donald Longueuil and Samir Barai. The three traders have all pleaded guilty to insider trading crimes.
A former trader at Sonar Capital and SAC Capital Advisors, Mr. Freeman said that he and his co-conspirators paid Ms. Jiau about $120,000 a year for illegal stock tips that earned him and his funds tens of millions of dollars in trading profits. Ms. Jiau, a former employee at Taiwan Semiconductor and Nvidia, had deep contacts inside a number of semiconductor companies.
Still, “despite her information being very, very accurate, she was very difficult to work with,” said Mr. Freeman, 35, a Harvard graduate. Neither of his former employers has been accused of any wrongdoing.
Among the issues he said that he had with Ms. Jiau: she could be rude, she was hard to contact and she often canceled meetings at the last minute. But a focus of his testimony Monday was on Ms. Jiau’s persnickety behavior regarding the gifts that Mr. Freeman and his co-conspirators lavished on her.
In addition to the cash compensation, Mr. Freeman gave Ms. Jiau presents, including three iPhones. He also said the traders bought her a gift certificate to a clothing boutique “that we canceled at her request and replaced with a $300 gift certificate to the Cheesecake Factory.”
And then there were the lobsters. In November 2007, Ms. Jiau asked Mr. Freeman, who was based in Boston, for 12 lobsters. She wanted to serve them on Thanksgiving.
“I remember this because it was an unusual time to serve lobsters,” said Mr. Freeman, who mentioned that he had a family home in Maine.
A prosecutor then showed Mr. Freeman an e-mail that he had sent to his secretary with the subject line, “Can you please send lobsters to Winnie?”
“I know you hate her but we have to do this,” he wrote.
“Sure thing,” the secretary, Annie Gallin, replied. “I hope she gets sick from the lobsters.”
“Me too (but not dying, just suffering),” Mr. Freeman responded.
Ms. Gallin dutifully sent a dozen lobsters from the Fresh Lobster Company in Gloucester, Mass., across the country to Ms. Jiau, who lives in Fremont, Calif. But there was a slight problem.
“Typical Winnie to leave 12 lobsters to die at FedEx,” Ms. Gallin wrote in a follow-up e-mail. “She has no heart.”
She did, however, like to serve lobster on the holidays. The next month, Ms. Jiau asked for another dozen lobsters for Christmas, a request with which Mr. Freeman dutifully complied.
In his testimony, Mr. Freeman also said he circumvented compliance rules at SAC Capital that prohibit its traders from talking to employees of public companies when he struck a compensation arrangement with Ms. Jiau.
The news that SAC had a specific ban against discussions with public company employees comes amid a flurry of negative headlines about the hedge fund. Federal authorities are investigating trading by Steven A. Cohen, the billionaire investor who heads the fund, as well as the fund’s trading surrounding a number of large mergers-and-acquisitions announcements.
Mr. Freeman also testified that SAC terminated him in January 2010 because of poor performance. “My financial results were not as good as they expected them to be,” he said.
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