Local Tech Wire

RESEARCH TRIANGLE PARK, N.C. – Former IBM executive Robert Moffat wants to serve probation, not prison time, as part of his plea deal for getting ensnared in Wall Street’s largest hedge fund insider trading case.

Moffat also acknowledges in court papers that he had an "intimate relationship" with Danielle Chiesi, the Galleon hedge fund executive to whom he passed confidential information about IBM and AMD.

Bloomberg reported the Moffat news Tuesday afternoon.

“Ms. Chiesi was not the passive recipient of information from Mr. Moffat,” the filing said, according to Bloomberg. “To the contrary, she manipulated or ‘played’ him to obtain information she could use to New Castle’s advantage.” (Read the )

Prosecutors directing the insider trading case against Moffat want him to be sentenced to six months in prison.

Prosecutors also spelled out in their sentencing argument in federal court on Monday why Moffat provided information to Chiesi.

Moffat, who once lived in Raleigh and had many connections to the Triangle, was having an affair with Chiesi.

"As far as the government has determined, his motive was to help a woman with whom he was having an intimate, personal relationship," Reuters quoted the government’s sentencing memorandum as saying.

According to the Reuters report, prosecutors said Moffat “repeatedly engaged in his fraudulent schemes with Chiesi, knowing full well that she was going to execute securities trades for a hedge fund.”

Moffat , and prosecutors said in May that he was involved with Chiesi.

Sentencing is set for Sept. 13.

A six-month term “is consistent with Moffat’s plea agreement,” Reuters quoted prosecutors as saying. ()

Moffat was charged last fall for providing Chiesi with insider information about a deal between IBM and Advanced Micro Devices.

Chiesi and Raj Rajaratnam, the founder of Galleon, face trial in January.

In May, Mark Kurland, who supervised Chiesi, pled guilty and was sentenced to 27 months in jail.

Earlier in the proceedings, Moffat’s attorney Kerry Lawrence said Moffat was seeking probation.

“Mr. Moffat is the least culpable person charged in connection with the entire case, and the government agreed today that he was less culpable than Mr. Kurland,” Lawrence said in a phone interview,” Lawrence told Bloomberg news on May 21.

Moffat, 53, could have faced up to 25 years in prison. Once considered a candidate for chief executive officer at IBM, he has been free on $2 million bail.

The executive has numerous Triangle connections. Once a top executive in IBM’s personal computer division that was largely based in the Triangle, he also was a member of the advisory board at Lenovo. Lenovo bought IBM’s PC division in 2005.

Moffat was considered the highest level executive arrested in connection with a scheme that centered on the securities trades of a portfolio manager for Galleon Group.

During a March hearing in U.S. District Court in Manhattan, Moffat told the magistrate in a shaky voice that he provided inside information between August and October 2008 to Chiesi,.

At the time, Moffat was senior vice president and group executive at IBM’s Systems and Technology Group.

"I disclosed this information in this case intentionally and I knew that what I was doing was wrong," he said.

After the plea, Lawrence, released a statement saying Moffat "accepted responsibility for his conduct in improperly disclosing confidential information" to Chiesi.

The lawyer wrote that Moffat never engaged in any trading in connection with inside information he gave out and he received no money or other financial benefit in return.

"Mr. Moffat deeply regrets his conduct and is deeply sorry for the embarassment his conduct has caused to his family and to his former employer, IBM," the statement said.

Chiesi, 44, of Manhattan, faces up to 155 years in prison.

The Associated Press contributed to this report.

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