Robert Moffat, a former IBM executive who was once tipped to be the company’s CEO, has been jailed for six months and fined $50,000 after being found guilty of insider trading.
Earlier this year, Moffat admitted that he had given insider information to hedge fund manager Danielle Chiesi in 2008, including details of the impending sale of IBM’s PC unit to Chinese manufacturer Lenovo.
According to his lawyers, Moffat did not profit by sharing this information. He was having an affair with Chiesi at the time, the court heard.
“Why the defendant betrayed the only employer he has had for his entire career has not been addressed,” said U.S. District Judge Deborah Batts following the sentencing. “His astounding breach of his fiduciary duty to his employer is why he is here.”
Other IT executives implicated in the trial include Rajiv Goel, director of strategic investments at Intel Capital, and an unnamed executive at rival chipmaker AMD.
Both Chiesi and Raj Rajaratnam, billionaire founder of the Galleon fund at the centre of the case, deny the charges against them.