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 18,426.32 -30.03 -0.16%
Nasdaq 5,158.15 3.17 0.06%
S&P 500 2,171.03 0.97 0.04%
Treasuries 1.48 -0.03 -1.92%
Data as of 10:49am ET
Company Price Change % Change
Ford Motor Co 12.83 0.12 0.94%
Bank of America Corp... 14.59 -0.09 -0.61%
Regions Financial Co... 9.16 -0.01 -0.05%
Facebook Inc 125.65 0.65 0.52%
Chesapeake Energy Co... 5.23 0.04 0.77%
Data as of 10:34am ET
Sponsors

Sections

HSBC banker arrested at JFK airport as he prepared to leave the country. He and former trader face federal charges they manipulated currency trades. More

The U.S. economy only grew 1.2% between April and June compared to the same time a year ago, according to official figures released Friday. More

Sheryl Sandberg says she supports Hillary Clinton for president, because she would help close the gender gap, and because she's 'the most qualified candidate.' More

It's about to get harder for some luxury all-cash home buyers to hide their identity from the U.S. government. More