Former IBM exec jailed for part in Galleon insider trading case

14 September 2010

Robert Moffat, a former senior vice-president at IBM, has been jailed for his part in the Galleon Group insider trading case.

He has been given a six-month jail sentence after pleading guilty to passing on confidential information to consultant Danielle Chiesi, who was working for New Castle Partners - a subsidiary of Bear Stearns Asset Management - at the time of the offences.

Moffat, who was having an affair with Ms Chiesi, said he gave her tips concerning Advanced Micro Devices (AMD), Lenovo and IBM itself, reports the Financial Times.

Between August and October 2008, he is said to have told her about disappointing sales at IBM, an AMD plan to sell its manufacturing operations and earnings data from Lenovo, where he was a non-voting member of the board.

Ms Chiesi is to stand trial for conspiracy and securities fraud next year as she has denied the case made against her.

She will be in the dock with Galleon Group founder Raj Rajaratnam, the man said by prosecutors to be at the center of a multimillion dollar insider trading scam.

A total of 21 people have been charged for their involvement in the ring, with 12 pleading guilty so far.

Mr Moffat was given a two-year term of supervised release in addition to his prison sentence, along with a $50,000 fine.

Deborah Batts, the US federal court judge in his case, said: "White collar crime is just as destructive to the social fabric as drugs and violence."

Earlier this year, prosecutors claimed Mr Rajaratnam and Ms Chiesi had made as much as $49 million from illegal insider trading, with the Galleon Group founder getting $45 million of this amount, reported Reuters.

They were said to have traded on information relating to companies such as eBay, Google, Hilton Hotels and Intel.

By Asim Shah

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