Ex-IBM executive admits role in Galleon insider trading scandal


Ex-IBM executive admits role in Galleon insider trading scandal

Warwick Ashford

Robert Moffat, former senior vice-president of IBM's $19bn systems and technology group, has admitted providing information to privately owned hedge fund sponsor Galleon Management.

Moffat stepped down in November 2009 after being implicated in the insider trading scandal which involved at least six technology companies, including IBM, AMD, Intel, Google and Sun Microsystems.

Although he initially denied any wrongdoing, Moffat has told a New York court that he disclosed non-public information about AMD, Lenovo and IBM to friend, Danielle Chiesi.

But Moffat's lawyer said in a statement that while he had pleaded guilty, he never engaged in any trading or received any money or other financial benefit.

Chiesi and Galleon founder Raj Rajaratnam have been charged with passing information to the fund, but deny the charges.

The fund is believed to have made $49m by trading shares based on insider information, according to the Financial Times.

Some 21 people have been charged as part of the insider trading scandal, including former executives from other US companies.

Hector Ruiz, chairman of AMD spin-off Globalfoundaries, left his post at the same time as Moffat after being implicated in the case.

In February, Rajiv Goel, who was director of strategic investments at Intel's investment division until late 2009, admitted profiting from Galleon's trading on his tips. According to court papers, Goel passed inside information to Galleon from 2007 to 2009.

Goel admitted in court that he passed Intel earnings-related information to Rajaratnam days before the chipmaker announced its quarterly earnings in April 2007.

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