Robert Moffat Jr., ex-Vice President IBM, appeared in Manhattan federal court today, and pleaded guilty to one count each of conspiracy and securities fraud, becoming the latest major white-collar criminal around. The New York District Attorney’s office says that this is probably the biggest hedge fund insider trading case ever.
For a period of 3 months in 2008, Moffat traded confidential IBM information to New Castle Partners, a hedge fund group part of JPMorgan Chase, manipulating the market and trading shares of stock on insider information. Proof of these activities came when the government became suspicious and began wiretapping.
Moffat faces up to 20 years in prison and a fine of up to $5 million. The sentencing will be on July 26. One question why corporate bigshots who get paid 6 to 7 figure salaries feel the need to practice fraud and embezzlement?