Former IBM exec pleads guilty to securities fraud

Robert Moffat, a former high-flier at IBM who was seen as a possible future chief executive of the company, has pleaded guilty to securities fraud in a court in New York, and faces up to six months in prison.

Moffat's involvement first became apparent in October 2009, when IBM said that he had been "placed on a leave of absence as a result of a US federal investigation into his personal activities" and is "no longer an employee of IBM".

The apparent centre of the trading scams was Danielle Chiesi, a friend of Moffat's who worked during the relevant time period at New Castle Partners, an equity fund group.

A statement from the US Attorney's Office said that Chiesi took financial performance information from Moffat concerning IBM and Lenovo, of which he was also a board member, as well as information about AMD.

Wiretaps were used to confirm Moffat's involvement, and recorded phone calls revealed Moffat telling Chiesi that there was "zero chance" that AMD's plans to spin off its manufacturing business would not go ahead.

The court said that Moffat had provided the information "in breach of fiduciary and other duties of trust and confidence that he owed to IBM and Lenovo", and that this had allowed Chiesi to "illegally execute securities transactions".

"Robert Moffat wilfully ignored his professional and legal responsibilities by secretly feeding inside information to his friend," said US attorney Preet Bharara in summing up the decision.

"Moffat's guilty plea marks the 11th conviction in this ongoing insider trading investigation."

Other executives under scrutiny include former Intel executive Rajiv Goel, who pleaded guilty earlier this year, and former AMD chief executive Hector Ruiz, who was not charged.

Ruiz stepped down from his role at AMD when the first hints of his involvement became apparent, while Moffat was shown the door by IBM when his name was mentioned.