Feeds

Ex-IBM heir apparent gets six months in the slammer

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

Top 5 reasons to deploy VMware with Tegile

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. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
The 'fun-nification' of computer education – good idea?
Compulsory code schools, luvvies love it, but what about Maths and Physics?
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.