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Former IBM executive sentenced to 6 months in Galleon insider trading case

A judge for the US District Court for the Southern District of New York [corporate website] sentenced former IBM [corproate website] senior vice president Robert Moffat to six months in prison Monday and ordered him to pay a $50,000 fine for his role in the largest insider trading trading case in US history. In March, Moffat pleaded guilty [JURIST report] to insider trading charges stemming from an investigation centered on Galleon Group [partnership website] hedge fund founder Raj Rajaratnam [JURIST news archive]. Moffat admitted giving confidential information about Advanced Micro Devices (AMD) and Lenovo, Ltd. [corporate websites] to New Castle Funds, LLC adviser Danielle Chiesi. Moffat will begin serving his sentence in June 2011 so that he can see his daughter graduate from college in May. Twenty-one people were charged [JURIST report] in the Galleon case, and 12 have pleaded guilty.

In February, a federal judge decided Rajaratnam's criminal trial will begin October 25 [JURIST report]. Former Intel Capital [corporate website] executive Rajiv Goel pleaded guilty [JURIST report] to insider trading charges in connection with the Galleon probe earlier in February. Rajaratnam, Chiesi, Goel and Moffat were arrested in October and charged [complaint, PDF] along with two other individuals and two business entities with insider trading. The complaint alleged that the individuals provided Galleon Group and another hedge fund with material nonpublic information about several corporations upon which the funds traded, generating $25 million in illicit gain. Rajaratnam and Chiesi pleaded not guilty [JURIST report] in December after being indicted for insider trading.

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