Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Former IBM exec Moffat gets six months in jail

By David Goldman, staff writer


NEW YORK (CNNMoney.com) -- Former IBM executive Robert Moffat was sentenced on Monday to six months in a federal prison for insider trading.

Moffat, once the senior vice president of IBM's (IBM, Fortune 500) systems and technology group and a potential successor to CEO Sam Palmisano, pleaded guilty in March to charges of leaking information to Danielle Chiesi, a Wall Street analyst for New Castle Funds LLC.

The former Big Blue executive -- also a member of Lenovo's board of directors -- admitted to sharing inside information with Chiesi about the companies, as well as chipmaker AMD (AMD, Fortune 500), from August through October 2008. Money wasn't Moffat's motive: He didn't make any stock trades based on his information.

But had had an affair with Chiesi, who is at the center of the largest hedge fund insider trading case in history. Among others charged were Raj Rajaratnam, founder of the Galleon Group hedge fund; a McKinsey & Co. director; a high-level Intel (INTC, Fortune 500) executive; and the head of New Castle Partners, a hedge fund that was once part of Bear Stearns.

So far, 12 of 21 people charged have pleaded guilty.

U.S. District Judge Deborah Batts, who sentenced Moffat, also fined him $50,000.

"Even high-flying executives do not receive get-out-of-jail-free cards for participation in insider trading," Manhattan U.S. Attorney Preet Bharara said in a written statement about the sentencing. "As a senior executive at IBM, Robert Moffat was entrusted with secret and valuable information. As today's sentence reflects, illegally betraying that trust is a serious crime." To top of page

Search for Jobs

Index Last Change % Change
Dow 19,758.63 -68.62 -0.35%
Nasdaq 5,537.38 -17.95 -0.32%
S&P 500 2,260.86 -10.45 -0.46%
Treasuries 2.39 -0.07 -3.00%
Data as of 12:48pm ET
Company Price Change % Change
Qualcomm Inc 54.98 -7.90 -12.57%
Bank of America Corp... 22.49 -0.15 -0.68%
General Electric Co 29.69 -0.84 -2.74%
Chesapeake Energy Co... 6.57 -0.12 -1.79%
Ford Motor Co 12.28 -0.07 -0.61%
Data as of 12:33pm ET
Sponsors

Sections

McDonald's is still racking up impressive sales growth overseas. But consumers in its home market of the United States are starting to eat elsewhere. And that could be a big problem as McDonald's faces tougher competition. More

President Trump's decision to jettison the largest proposed free trade deal in history leaves the door open for Beijing to push its own brand of trade. More

Sprint is buying 33% of Jay Z's Tidal in a partnership that will give the carrier's customers access to the app's exclusive music content. More

Americans tend to be poor savers. If you're one of them, this rule can help you break that bad habit for good. More