Former IBM exec gets jail time for insider trading scheme
After pleading guilty in March, former senior VP Robert Moffat is sentenced to six months in jail over his role in a hedge fund insider trading case.
Former IBM executive Robert Moffat on Monday was sentenced to six months in jail for his part in a major insider trading scheme, according to news reports.
Moffat was also reportedly ordered in U.S. District Court in Manhattan to pay a fine of $50,000 after serving his jail time, which is due to begin on June 11 of 2011.
In March, the former IBM executive pleaded guilty to revealing insider information about IBM, Lenovo, and Advanced Micro Devices to New Castle Funds consultant Danielle Chiesi, with whom he allegedly claimed an intimate relationship, according to a Bloomberg report.
Beyond involving Moffat and Chiesi, the crime allegedly spread to 12 other people--in two related insider-trading schemes--including Raj Rajaratnam, founder of hedge fund Galleon Group. Rajaratnam and the others have been charged with securities fraud by federal prosecutors alleging that they were involved in the insider trading of several tech companies, including Intel, Google, IBM, and AMD.
Rajaratnam and Chiesi have both been indicted for using stock tips to earn millions in illegal trades, Bloomberg said. Both have proclaimed their innocence and are awaiting trial next year.
Since Moffat allegedly committed the crime in an attempt to impress Chiesi, his lawyers argued that she used the relationship to manipulate him to get confidential information. Moffat claimed he didn't engage in insider trading himself or receive any profit from the deals, prompting his attorneys to also ask for probation.
But U.S. District Judge Deborah Batts rejected the defense's request, calling white collar crime "just as destructive to our social fabric as the crimes of drugs and violence," according to Bloomberg.
Moffat was forced to leave IBM last October following the charges. During his 30-year career with his former employer, Moffat was once considered a candidate for chief executive officer.