IBM suspends exec charged with insider trading
Posted October 19, 2009 3:15 p.m. EDT
Updated October 19, 2009 5:34 p.m. EDT
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.
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.