Robert Moffat Jr pleaded guilty to insider trading charges in Manhattan court on Monday. Sentencing has not yet been determined.
Larry Dignan Sam Diaz first reported on this story on October 16th. In an FBI press release, it details how deep Moffat was involved;
From August to October 2008, Moffat engaged in an insider trading scheme in which Moffat obtained material, nonpublic information (Inside Information) relating to IBM, Advanced Micro Devices, Inc. (AMD) and Lenovo Group Ltd. (Lenovo), and provided it to Danielle Chiesi, a friend who worked during the relevant time period for New Castle Partners, an equity hedge fund group affiliated with JPMorgan Chase & Co. At the time of the conspiracy, Moffat was a Senior Vice President and Group Executive in IBM's Systems and Technology Group. In addition, Moffat also served as a non-voting member of Lenovo's Board of Directors.
Moffat provided the Inside Information to Chiesi in breach of fiduciary and other duties of trust and confidence that he owed to IBM and Lenovo, to allow Chiesi to illegally execute securities transactions.
Specifically, in September 2008, Moffat provided Chiesi with Inside Information relating to IBM's and Lenovo's performance in the companies' respective fiscal quarters ending in September 2008. In addition, in August and September 2008, Moffat provided Chiesi with Inside Information relating to a business deal pursuant to which AMD would spin off its manufacturing business into a separate entity. Moffat was involved in the deal because AMD needed to obtain a license from IBM in connection with the deal in order to use certain IBM technology. On Aug. 22, 2008, during a phone call that was intercepted by the Government pursuant to a court-authorized wiretap, Moffat provided Chiesi with information regarding the timing of the deal's announcement and told her that there was "zero" chance that it would not happen. On Sept. 22, 2008, during another phone call that was intercepted by the Government pursuant to a court-authorized wiretap, Moffat told Chiesi that AMD was going to "try to announce [the deal] by 10/10," referring to Oct. 10, 2008. On Oct. 7, 2008, AMD announced the deal.
Moffat was a senior VP responsible for hardware, writes Dignan;
Moffat, who has been in his most recent position since July 2008, is responsible for "all IBM hardware offerings as well as the microelectronics division," according to his bio on the company's Web site. (PDF) The company's integrated supply chain operations, which include global manufacturing, procurement and customer fulfillment, also report to him. In his position, Moffat reported directly to company chairman, president and CEO Sam Palmisano.
Moffat faces 20 years on each count of insider trading.
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