IBM suspends exec charged with insider trading

Posted October 19, 2009

— 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.

Replacing Moffat on an acting basis is Rodney Adkins, who is IBM’s senior vice president in charge of development and manufacturing. Adkins, a graduate of Georgia Tech, is the highest-ranking black executive IBM has ever had, according to The Associated Press.

"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."

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.

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.


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  • Mr William Oct 20, 2009

    Will he be allowed to replicate Lotus Notes from jail?

  • EverythingTicksMeOff Oct 20, 2009

    If an IBM employee was arrested for a crime involving the company, the company would investigate and if they think he did it, he would be fired immediately. I am surprised that Bob Moffat was not fired and merely suspended. Maybe you don't fire executives.

    If an employee were arrested for some crime not involving the company, it would depend on whether or not you had enough vacation to take time off until you made bail, had your trial, and possibly served your sentence. If you didn't have enough vacation to deal with your absence you would be fired when your vacation ran out. I suppose you could make a case to the company for a leave of absence to deal with the trial but I doubt you would get it.

  • yellow_hat Oct 19, 2009

    Could not have happened to a nicer guy!

  • ugottabkiddinme Oct 19, 2009

    bout time they started crackn down...lil to late tho with the economy in the dumps...he'll get a year in a very mininal security prison with all kinds of martha stewart

  • makeitright Oct 19, 2009

    nail him to the wall and everyone even remotely connected. Take everything he has and everything he might ever have in the future. I bet the Board had him in a fogged state of mind like his Akers buddy years ago.....

  • CrewMax Oct 19, 2009

    I bet he comes out ahead with no time, and making all his backpay and bonus. Executives take care of each other.

  • whatelseisnew Oct 19, 2009

    "Only suspended....anyone else would have been fired."

    No they would not fire someone for being charged with a crime. If they did, and the person was subsequently exonerated, they would be facing a nice big fat law suit. For now, removing him as an officer of the company and suspending him, is all they can do. Hopefully, any employment contract would negate any sort of golden parachute if Moffat is convicted.

  • domesticgoddess Oct 19, 2009

    Only suspended....anyone else would have been fired.

  • jet2rdu Oct 19, 2009

    Looks like there will be plenty of golfers, enough for their own tournaments, at The Butner Federal Corrections Country Club soon.

    Don't be surprised, when he has his tee times there with his NY and NC buddies, Robert Moffat tries to outsource the caddies to India or Brazil.

  • Nancy Oct 19, 2009

    Well, he had a lovely wife and great kids, wonder how they feel about him now? My daughter used to play softball with his...great kids and wife. He does have a huge ego though, well known within the company. He was also the one who came up with IBM's Project LEAN - which was basically cutting heads and outsourcing jobs to keep bottom line up. Not a well liked guy after THAT particular pet project he created.

    The karma bus just turned him into road pizza.