A promising executive at IBM was recently placed on leave following insider trading charges brought on earlier this month. The charges involved five other individuals. The scandal involved companies like Google, Intel, AMD and two major hedge funds. This news has shocked many in the tech industry as it involved well known individuals.

Earlier this month I reported a scandal that shook the industry involving Raj Rajaratnam, founder of Galleon Group, which is one of the largest hedge funds in the world. The New York based hedge fund company manages $7 billion in funds. Rajaratnam, the mastermind behind the insider trading scandal was charged with 13 counts of securities fraud and conspiracy. Another hedge fund that was implicated in the scandal was New Castle Partners.

Robert Moffat is a high-ranking IBM executive and once thought to be on the fast track to becoming the CEO of the company. However, any future prospects for Moffat at IBM have been squashed in light of the recent scandal. Moffat has been placed on leave following the charges brought against him by the U.S. Attorney earlier this month.

The government accused Moffat of passing along secret information about the company’s future plans to Danielle Chiesl, an employee of New Castle partners. IBM issued a public response stating that Moffat “is no longer an employee of IBM.”

Red Adkins has been appointed to take over Moffat’s responsibilities as senior vice president, STG at IBM. Moffat’s lawyer, Kerry Lawrence stated Moffat was “shocked” by the charges and indicated that his client would plead innocent. There is still no new information regarding how some of the insider trading was done for the other major tech companies listed. Could there be other executives involved with the scheme that the FBI has yet to catch?

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Entry was posted on Sunday, November 1st, 2009 at 1:16 pm under Legal, Scams, Security, Technology.

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