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

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,447.68 22.83 0.14%
Nasdaq 4,107.14 20.91 0.51%
S&P 500 1,868.41 6.10 0.33%
Treasuries 2.72 0.08 3.22%
Data as of 1:49pm ET
Company Price Change % Change
Bank of America Corp... 16.23 0.10 0.62%
Facebook Inc 59.74 0.02 0.03%
General Electric Co 26.70 0.57 2.20%
Cisco Systems Inc 23.14 0.11 0.50%
Micron Technology In... 23.57 1.09 4.85%
Data as of 1:34pm ET
Sponsors

Sections

Federal authorities said he knew the spill was larger than reported and dumped $1 million in stock about a week after the incident began. More

Obama's proposed budget would raise $1.4 trillion more revenue and increase noninterest spending by $446 billion more than current policies, the CBO said in a new analysis. More

Schwinn, Trek and Cannondale are all iconic American bicycle brands. But none of them are made in the United States. More

As Detroit moves closer to reaching a bankruptcy deal, retired civilian workers are poised to be left worse off than firemen and police officers. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.