Former IBM exec Robert Moffat sentenced for insider trading

New York : A former senior executive at IBM Robert Moffat, Jr., was sentenced on Monday in Manhattan federal court to six months in prison for his participation in the largest hedge fund insider trading case in history.

U.S. District Judge Deborah A Batts, who imposed the sentence, also imposed a two-year term of supervised release and a $50,000 fine.

According to documents previously filed in Manhattan federal court and statements made during Moffat’s guilty plea proceeding the 54-year-old man from Ridgefield, Connecticut, was a senior vice president and group executive in charge of IBM’s Systems and Technology Group.

In addition, Moffat served as a non-voting member of the Board of Directors of the Lenovo Group Ltd.

From August to October 2008, Moffat engaged in an insider trading scheme in which he obtained material, nonpublic information relating to IBM, Lenovo, and AMD, which he provided to CHIESI.

Moffat provided the Inside Information to CHIESI in breach of fiduciary and other duties of trust and confidence that he owed to IBM and Lenovo, to assist CHIESI illegally execute securities transactions.

Moffat knew that the information he provided to CHIESI was material and non-public, and that it would be helpful to CHIESI in performing her job executing securities transactions.

On March 29, 2010, Moffat pled guilty to conspiring to commit insider trading crimes with Danielle Chiesi, who worked at New Castle Partners, an equity hedge fund affiliated with Bear Stearns Asset Management and then JPMorgan Chase.

Moffat also pled guilty to substantive securities fraud. CHIESI has been charged in a separate Indictment.