New York (HedgeCo.net) – Robert Moffat, Jr., a formerly of IBM, pleaded guilty in the Manhattan federal court to conspiracy and securities fraud.
“Moffat’s guilty plea marks the 11th conviction in this ongoing insider trading investigation.” U.S. Attorney Preet Bharara said, “Together with our partners at the FBI and the SEC, we will continue to protect the integrity of our markets by prosecuting illegal tipping by corporate professionals.”
From August to October 2008, Moffat got insider information relating to IBM, Advanced Micro Devices, Inc. (AMD) and Lenovo Group Ltd. (Lenovo), according to information and statements made during the guilty plea proceedings.
In what is being called the largest US hedge fund insider trading case in history, Moffat confessed to providing the insider information to to Danielle Chiesi, Raj Rajaratnam’s co-defendant in the Galleon hedge fund case. At the time she worked for New Castle Partners, an equity hedge fund group affiliated with JPMorgan Chase & Co.
The court documents reveal that in September 2008, Moffat provided Chiesi with information relating to IBM’s and Lenovo’s performance in the companies’ respective fiscal quarters ending in September 2008.
The conspiracy count carries a maximum sentence of five years in prison and a maximum fine of the greater of $250,000 or twice the gross gain or loss from the offense. The securities fraud count carries a maximum sentence of 20 years in prison and a fine of $5 million. The sentencing is set for on July 26, 2010.
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