‘I Disclosed Material Non-Public Information,’ Guilty IBM Exec Says In Hedge Fund Insider Trading Case

Let’s see. There’s that guy, and this one, and another. And him, and don’t forget that one. OK. Now, add to that list Number 11: Robert W. Moffat Jr., a former IBM senior executive, has pleaded guilty in the insider trading case involving Galleon Group founder Raj Rajaratnam. 

In his statement to the court, Moffat said:
 
“Between August and October, 2008, while I was employed as Senior Vice President and Group Executive at IBM in Westchester County, and while I was in charge of the Systems and Technology Group, I disclosed material non-public information to Danielle Chiesi, a friend who I knew worked at a hedge fund located in Manhattan.
 
“I disclosed to Ms. Chiesi the following material, non-public information about Advanced Micro Devices, Inc. (known as AMD), Lenovo Group Limited and IBM Corporation. I learned all of this information in my capacity as Senior Vice President of IBM.
 
“First, I told her about a pending corporate reorganization at AMD. I knew this information because IBM had been asked by AMD to provide a license for the use of its technology as part of the reorganization.
 
“Second, Lenovo had purchased IBM’s personal computing business several years ago and, as a result, I was asked to serve as a non-voting member of the Board of Directors of Lenovo. On one occasion in September, 2008, soon after I had participated in a meeting of the Lenovo Board, I told Ms. Chiesi that Lenovo’s earnings during the pending quarter were poor.
 
“Third, in conversations with Ms. Chiesi about IBM in September, 2008, I stated to her, for example, that sales of IBM Systems X servers were not good and that the other servers were meeting my expectations.
 
“I knew that the information I had provided to Ms. Chiesi was material and not public. I also knew that she worked as a trader at a hedge fund and that she specialized in technology stocks. I knew that the information I provided would be helpful to her in performing her job executing securities transactions. I also knew that I owed a duty to my employer, IBM, not to disclose this information and that, by disclosing it, I was breaching my duty of confidentiality.
 
“I disclosed this information to Ms. Chiesi intentionally and knew that what I was doing was wrong.”