When news that executive Robert Moffat was arrested as part of the Galleon insider trading case broke last fall, experts we talked to expressed doubt he would ever admit to committing any crime.
But Moffat was soon an ex-executive of IBM and today he pleaded guilty to conspiracy and securities fraud in Manhattan federal court, the local US Attorney’s office announced.
Specifically, Moffat admitted to providing insider information to Danielle Chiese about IBM’s earnings prior to their release and about a pending AMD spin-off. The tipping occurred in late summer and fall 2008. In August 2008, government officials recorded a call between Moffat and Chiese in which he assured her the relevant deal would go forward.
Chiese (and co-defendant and Galleon founder Raj Rajaratnam) plan to challenge the use of the wiretaps, but, wiretaps or no, the government will now have the benefit of Moffat’s testimony in their case against Chiese.
Moffat faces up to five years in prison and a $250,000 fine. His sentencing hearing is scheduled for July 26. Prior to his arrest, Moffat served as a Senior Vice President and Group Executive in IBM’s Systems and Technology Group.
The US Attorney’s press release stated this is the 11th Galleon-related conviction. Chiese and Rajaratnam have repeatedly asserted their innocence and their criminal trial is scheduled to begin on October 25.
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