A securities expert testified Thursday that the investment adviser who allegedly helped Nathan A. Chapman Jr. defraud the Maryland state pension fund of millions of dollars was "an extraordinary mutual fund manager."

Consultant Jason Frankl, testifying for Chapman's defense in U.S. District Court, said Alan B. Bond was among the highest performing of the "sub-advisers" Chapman hired to invest pension assets under his control.

Frankl, who said under cross-examination that he was to be paid close to $50,000 for his work as an expert for the defense, also defended Bond's decision to invest some of the pension money in Chapman's own companies -- transactions that the government says ultimately cost the pension fund $5 million.

Chapman, a former chairman of the state university system's Board of Regents, once managed more than $140 million from the pension fund in his capacity as a money manager and entrepreneur.

He was the primary money manager for a trust that pooled assets from three pension funds. The Maryland pension system, whose beneficiaries include police officers and teachers, was the largest contributor to the trust, accounting for more than half of its assets.

Under the concept of that particular trust, women and minority sub-advisers were hired to manage its assets. Among them was Bond, to whom Chapman entrusted a total of $33 million from 1997 to 2000. Bond was convicted in two unrelated financial crime cases in 2002 and is serving a prison sentence of more than 12 years.

Prosecutors accuse Chapman of increasing Bond's share of the portfolio -- even after Bond was indicted in 1999 for financial fraud and deserted by partners and other customers -- in exchange for investments in Chapman companies.

Testifying earlier in the trial under a grant of immunity, Bond said Chapman instructed him to invest in the online financial services company eChapman.com when it went public in June 2000 and, in exchange, gave him an additional $10 million from the trust to invest the next month.

On cross-examination, Frankl acknowledged that Chapman's defense team was paying him $400 an hour for his testimony and said that, including 120 hours spent in preparation for his testimony, he expected to receive close to $50,000.

But first, under questioning from defense attorney William R. "Billy" Martin, Frankl suggested that Chapman's decision to hire Bond, a onetime Wall Street darling, to invest pension assets made business sense, as did Bond's decision to invest those assets in Chapman's companies.

Frankl went on to say that eChapman.com was in some respects a "less risky" venture than other technology-based initial public offerings of the same period. He said "it was very common" for pension systems to invest in IPOs.

Prosecutors, who called dozens of witnesses over six weeks, have sought to portray eChapman.com as a risky investment that was not permitted under the rules governing the trust.

They allege that when the company's share price declined sharply on the first day of trading, Chapman turned to Bond in a desperate effort to prop up the stock.

Frankl and Assistant U.S. Attorney Jefferson M. Gray clashed over various benchmarks against which Bond's performance might be measured, with Gray suggesting that Frankl had chosen both the benchmarks and the time frame to cast Bond in a misleadingly favorable light.

Frankl responded by telling Gray that the business of assessing stock management is "very technical."

"If you don't use the proper benchmarks and the proper periods," Frankl testified, "you get the wrong answer."

"I couldn't agree with you more, Mr. Frankl," Gray answered.