Galleon’s IBM Tipster: Affair Wasn’t About Sex

Jul 7 2010 | 11:37am ET

The former IBM executive who pleaded guilty to tipping off one of the two main defendants in the Galleon Group insider-trading case admits to having an affair with that defendant, former New Castle Partners executive Danielle Chiesi. But Robert Moffat insists that it was not about sex: It was about “clarity in the business environment,” he told Fortune magazine.

In a long profile of a man once tipped to be the next CEO of IBM, Fortune writes that Moffat’s lawyer told him not to discuss the case or his relationship with Chiesi. But, facing six months in prison at his sentencing in September, Moffat could not resist offering a little clarity of his own.

“Everyone wants to make this about sex,” he told the magazine. “Danielle has an extensive network of business people. And she added clarity about what was going on in the business world.”

“I know in my heart what this relationship was about: clarity in the business environment,” the married father of four said.

Chiesi, a co-defendant of Galleon founder Raj Rajaratnam, has pleaded not guilty to the insider-trading charges. But in one of the wiretapped conversations she and Rajaratnam are seeking to exclude from the case, she reportedly told the hedge fund honcho, “Moffat’s terrific. He’s a huge coup for me.”

If it makes Moffat feel any better, Chiesi apparently saw their affair, which began in 2003, as a business relationship, as well. According to Fortune, “Chiesi had an affair with Moffat, but the person she truly loved was her boss, Mark Kurland, the co-founder of New Castle. But Kurland wouldn’t leave his wife and ultimately renounced Chiesi.” He also pleaded guilty in the case, and was sentenced to 27 months in prison.

According to Fortune, it was Kurland who pushed Chiesi to gather the confidential information from Moffat. On at least one occasion, he even listened in on the conversation, the magazine reports.

In one final twist, when Moffat was arrested in October, he was taken to Manhattan and put in a holding cell. There, he met two other friends of Danielle Chiesi: Mark Kurland and Raj Rajaratnam.


In Depth

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Future of Private Equity: New Opportunities, New Challenges

Feb 3 2017 | 6:41pm ET

The private equity industry’s astonishing rebound since the financial crisis has...

 

From the current issue of