Ex-IBM executive pleads guilty to insider-trading scheme

A former senior IBM executive on Monday pleaded guilty to insider-trading, to become the 11th confessed involvement in the Galleon case.

Robert Moffat Jr., 53, pleaded guilty to federal charges of conspiracy and securities fraud in which he had provided confidential information to a hedge fund consultant.

The charges carry a potential penalty of 25 years in prison. Sentencing was set for July 26.

Moffat, once considered a candidate for the IBM CEO, was deemed the highest-level executive ever arrested in a case that resulted in 21 arrests.

Moffat confessed to the Manhattan federal court Monday that he had provided inside information to tip off Danielle Chiesi, a former consultant for the New Castle Funds LLC, who was also accused of participating in the insider-trading scheme.

The New Castle Funds LLC is an equity hedge fund group of the Bear Steams Asset Management Inc..

"I disclosed this information in this case intentionally and I knew that what I was doing was wrong," said the former IBM executive.

But 44-year-old Chiesi has pleaded not guilty to charges in the insider-trading scheme that could carry for her a penalty of up to 155 years in jail.

She has asked that her trial be severed from that of Galleon Group founder Raj Rajaratnam who has also denied securities fraud charges that were first brought up in October last year.

During Monday's hearing, U.S. Attorney Preet Bharara said, "A senior executive at a Fortune 500 company, Robert Moffat, wilfully ignored his professional and legal responsibilities by secretly feeding inside information to his friend."

Prosecutors say that Rajaratnam may have made more than 50 million dollars through improper securities trading, making the Galleon case the largest insider-trading scheme involving a hedge fund.

Source:Xinhua