Ex-IBMer Moffat pleads guilty in insider-trading case

Former head of server unit may face more than 20 years of prison time

IBM's former server chief, Robert Moffat, on Monday pleaded guilty to charges of conspiracy to commit securities fraud in a case connected to an insider-trading scandal.

Sentencing in the case has been scheduled for July 26. The conspiracy charge carries a potential penalty of five years in prison, while the insider-trading charge has a maximum of 25 years.

Moffat is the latest technology executive to plead guilty in a case involving illegal trades that generated millions of dollars in illicit profits. Ten others have already pleaded guilty in connection with the case, including Rajiv Goel, formerly Intel treasury's managing director of investments.

Moffat entered a guilty plea in the U.S. District Court for the Southern District of New York. Moffat was arrested and charged in October along with Goel and three Wall Street traders including Raj Rajaratnam, founder of Galleon Group and Danielle Chiesi, a portfolio manager at New York-based New Castle Funds.

Chiesi and Rajaratnam allegedly tapped into a network of high-ranking corporate executives and insiders, including Moffat, to obtain confidential details about quarterly earnings and takeover activity of companies like Intel, Google, Sun Microsystems, Akamai Technologies, Sprint Nextel and Advanced Micro Devices, according to a court document filed by the U.S. Securities and Exchange Commission in October. In the wake of the SEC investigation, the DOJ has taken over prosecution of the case.

Moffat last week waived his right for grand-jury indictment, and the DOJ filed a notice of intent to bring criminal charges in the case. Ten others involved in the case have already pleaded guilty for their involvement in the alleged scam.

Moffat, formerly senior vice president of IBM's Systems and Technology Group, allegedly leaked insider information about IBM considering acquiring Sun to Chiesi. Chiesi allegedly made trades on behalf of New Castle Funds based on the tips and generated about US$1 million in illegal profits.

Chiesi worked along with Rajaratnam, who raked in close to $25 million in illegal profits, according to prosecutors.

Moffat was placed on a leave of absence shortly after he was arrested in October. His leave became permanent soon after, and it wasn't clear if he resigned or was fired by IBM.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags IBMinsider trading

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Agam Shah

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?