Ex-IBM Executive Jailed for Six Month for Security FraudBy Dipankar Das, Gaea News Network
Tuesday, September 14, 2010
Robert Moffat, 54, a former senior vice-president of IBM, has been sentenced for six month for Galleon Hedge Fund insider trading. The court also asked him to pay $50,000 as fine. Robert admitted that he provided insider information to Danielle Chiesi, then a consultant at New Castle Partners, an equity hedge fund unit of Bear Stearns Asset Management. Mr Moffat was romantically involved with Ms Chiesi and he passed her the information related to Lenovo and AMD Inc.
The information passed on by Mr Moffat between August and October 2008 included the earnings data on Lenovo, which he learnt of as a non-voting member of its board, and disappointing sales at IBM as well as plans by AMD to sell its manufacturing operations, according to prosecutors. Charges against Moffat got wide attraction because he was a high level executive at IBM, New York. Preet Bharara, the Manhattan US attorney commented that the verdict sends out signal how seriously the court handles white collar crime.
Authorities say profits from illegal trades was about US$50 million. Although, Moffat’s didn’t gain anything from the illegal trade, but, instead, Moffat did this to impress fellow defendant Danielle Chiesi, with whom he had an affair. Ms Chiesi and Raj Rajaratnam, the founder of Galleon Group, are due to stand trial next year for conspiracy charges and securities fraud in relation to multimillion dollar insider trading ring involving some of America’s best-known companies.