Wednesday, 26 April 2017
Last updated 13 hours ago
Aug 17 2010 | 11:59am ET
Robert Moffat, the former IBM executive who pleaded guilty in the Galleon Group insider-trading case, should spend six months in jail, the maximum under his plea agreement, prosecutors said yesterday.
A six-month sentence “is consistent with Moffat’s plea agreement,” prosecutors said. Moffat, one of a dozen people to plead guilty in the case, did so to conspiracy and securities fraud charges in March, admitting he passed on confidential information to Danielle Chiesi, a former executive at hedge fund New Castle Partners with whom he was having an affair.
Chiesi, who has pleaded not guilty in the case, is the co-defendant of Galleon Group founder Raj Rajaratnam. Their trial is currently set to begin in January.
“As far as the government has determined, his motive was to help a woman with whom he was having an intimate, personal relationship,” prosecutors wrote in their sentencing memorandum to U.S. District Judge Deborah Batts. Moffat “repeatedly engaged in his fraudulent schemes with Chiesi, knowing full well that she was going to execute securities trades for a hedge fund—one that had approximately $1 billion under management and whose trades could certainly move the market and have a substantial effect on the integrity of the stock market.”
Moffat was not accused of personally profiting from the alleged insider-trading scam.
Moffat, once considered a possible candidate to become IBM’s CEO, will be sentenced on Sept. 13. He is the second Galleon defendant to learn his fate for his role in the insider-trading circle; Chiesi’s former boss, New Castle co-founder Mark Kurland, was sentenced to more than two years in prison in May. Neither Moffat nor Kurland have cooperated with the investigation.