IBM places exec on leave in wake of alleged insider trading
- 20 October, 2009 04:49
IBM has placed Robert Moffat, the head of its Systems and Technology Group, on a leave of absence after he was charged by the U.S. Securities and Exchange Commission in an alleged insider-trading scheme.
Moffat, a senior vice president at IBM, was charged Friday with conspiracy to commit securities fraud. The SEC also charged other Wall Street and technology-company executives related to their alleged involvement in an insider-trading scandal scheme that the agency said netted millions of U.S. dollars in illicit profits. The SEC filed a complaint in the U.S. District Court for the Southern District of New York.
"In view of a U.S. federal investigation into his personal activities, [Robert] Moffat has been placed on temporary leave of absence and is no longer serving as an officer of IBM," the company said in a statement.
Rod Adkins has been named acting head of the Systems and Technology Group, IBM said. Adkins is currently the senior vice president for development and manufacturing of that group, according to IBM's Web site. Moffat's executive profile has been removed from IBM's Web site.
Moffat allegedly provided insider information when IBM was considering acquiring Sun Microsystems to Danielle Chiesi, a portfolio manager at New York-based New Castle Funds. Chiesi allegedly made trades on behalf of New Castle Funds based on the tips and generated about US$1 million in illegal profits.
Other executives arrested in connection with the alleged scam include Rajiv Goel, who is the Intel treasury's managing director of investments. Goel was placed on administrative leave by Intel on Friday.
Goel allegedly provided insider tips to trader Raj Rajaratnam of Galleon Group about certain Intel quarterly earnings and a pending joint venture concerning Clearwire, in which Intel has invested, the SEC said. Rajaratnam executed trades on Galleon's behalf based on the information, and the tips ultimately netted Goel close to $250,000 in illicit profits, the SEC said in the complaint.