IBM puts on leave executive accused of insider trading

Updated Oct. 20, 2009 at 7:49 a.m.

IBM puts on leave executive accused of insider trading

On The Web

Site Search

Get the latest news alerts: Follow LTW at Twitter.

Local Tech Wire

RESEARCH TRIANGLE PARK, N.C. – Robert Moffat, the senior IBM executive arrested on insider trading charges Friday, has been placed on leave, IBM (NYSE: IBM) said Monday afternoon.

Moffat, a senior vice president in charge of IBM’s hardware business, is no longer an officer with the company, IBM added.

The Wall Street Journal first reported the move against Moffat, quoting an IBM spokesperson.

A woman who answered the phone at Moffat's home in Connecticut said he would not comment, according to The Associated Press.

Kerry Lawrence, an attorney representing Moffat, said the government hasn’t accused Moffat of profiting from the alleged scheme.

“Not only have they not alleged that, but that definitely did not happen,” Lawrence said, according to The Associated Press.

The AP also noted that it is "unclear from the court filings how Moffat would have benefited." Moffat's lawyer declined to comment furhter on the case.

Replacing Moffat on an acting basis is Rodney Adkins, who is IBM’s senior vice president in charge of development and manufacturing. Adkins is a graduate of Georgia Tech.

"Rod Adkins has been named acting head of the Systems and Technology Group," Edward Barbini, an IBM spokesperson, told ChannelWeb. "In addition, Rod will continue in his role as leader of our Systems Development and Manufacturing.

"In view of the U.S. federal investigation into his personal activities, Mr. Moffat has been placed on temporary leave of absence and is no longer serving as an officer of IBM."

Adkins is the highest-ranking black executive IBM has ever had, according to the AP.

A 34-page formal complaint filed by the Securities and Exchange Commission against an alleged hedge fund insider trading ring accuses Moffat of providing “nonpublic information” about Sun and his own company.

Moffat, 53, allegedly conveyed the information Danielle Chiesi, 43, whom the SEC document describes as a “friend.” Chiesi is among the six people charged in the case. She worked at New Castle, the equity hedge fund group of Bear Stearns Asset Management Inc.

Moffat, who has been an advisor to Lenovo and was part of the management team that engineered the sale of IBM’s PC business to Lenovo in 2005, has been reported to be a confidant and likely successor to IBM Chairman and CEO Sam Palmisano.

(See Local Tech Wire’s report from Oct. 17 here.)

Also charged in the case was billionaire Raj Rajaratnam, a partner in Galleon Management and a portfolio manager for Galleon Group, a hedge fund with some $7 billion in assets under management.

The other three facing charges” Rajiv Goel of Intel Capital, Anil Kumar of McKinsey & Co., and Mark Kurland, a colleague of Chiesi at New Castle.

At IBM, Adkins is in charge of global server and storage systems hardware and software development. He also directs the microelectronics business, including semiconductors.

A veteran of IBM since 1981, he has experience in the printers, PCs, servers, storage and software segments. At one time he was general manager for desktop systems, for Unix systems and for pervasive software.

Adkins earned undergraduate and graduate degrees in electrical engineering from Georgia Tech.

Tags: IBM, Lenovo

Editor's Blog

The latest blog posts from our WRAL Tech Wire and WRAL editors. Read more articles…

WRAL Tech Wire