Feeds

Ex-IBM heir apparent gets six months in the slammer

No 'get-out-of jail-free' card, says US attorney

High performance access to file storage

Robert Moffat, the former general manager of IBM's Systems Group and a former board member of Chinese PC maker Lenovo, has been sentenced in a federal court in connection with the Galleon insider trading scam that was uncovered last October.

Moffat, who was once an heir apparent to run Big Blue once Sam Palmisano retires, was indicted on charges that he fed New Castle Funds hedge fund employee Danielle Chiesi insider information on AMD, IBM, and Lenovo and that Chiesi and billionaire founder and managing director of the $7bn Galleon Management fund Raj Rajaratnam used this information to profit illegally. Moffat allegedly passed this information to Chiesi between August and October, 2008.

Moffat was never accused of doing any illegal trades of his own, and Chiesi and Rajaratnam both pleaded not guilty to the insider trading charges in December 2009. By March of this year, after protesting his innocence, Moffat pleaded guilty to the charges leveled against him, and by August, Moffat was admitting that Chiesi and he were "intimate" and that he was telling her stuff to "appear important and knowledgeable."

US District Judge Deborah Batts sentenced Moffat to six months in prison for his part in the insider trading scam and also tacked on a $50,000 fine and a two-year follow-on term of supervised release from prison. Moffat is being allowed to begin serving his sentence in June 2011 so he can attend his daughter's graduation next year.

"As a senior executive at IBM, Robert Moffat was entrusted with secret and valuable information," said Preet Bharara, the US Attorney for the Southern District of New York in Manhattan who is managing the Galleon cases.

"As today's sentence reflects, illegally betraying that trust is a serious crime, and even high-flying executives do not receive get-out-of-jail-free cards for participation in insider trading. This office, along with our partners at the Federal Bureau of Investigation and the US Securities and Exchange Commission, will continue to pursue illegal insider trading, which compromises the integrity of our markets."

Moffat, who is 54, worked for IBM for 31 years and has run its PC, printer, and server divisions as well as knocked its supply chain into shape, offshoring large portions of it to Asia to save Big Blue big bucks.

The alleged Galleon insider trading scam is still being billed as the largest such scam in US history, with 21 people being criminally charged and now a dozen pleading guilty. ®

High performance access to file storage

More from The Register

next story
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
France bans managers from contacting workers outside business hours
«Email? Mais non ... il est plus tard que six heures du soir!»
Adrian Mole author Sue Townsend dies at 68
RIP Blighty's best-selling author of the 1980s
prev story

Whitepapers

Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.