Robert Moffat, who in March pleaded guilty to his role in the insider trading scandal that cost him his career at IBM, told Fortune magazine that his affair with former hedge fund trader Danielle Chiesi was motivated by business, not sex.
Robert Moffat, the former longtime IBM
executive who pleaded guilty in March to federal securities and fraud charges
for his role in a massive insider trading case, said his relationship with an
ex-hedge fund manager was more about business than sex.
In a detailed
story about the case
in Fortune magazine published July 6, Moffat, who
spent 31 years with IBM before his arrest in
October 2009, said his affair with Danielle Chiesi was grounded in business,
despite the allegations of a physical relationship.
In an interview with the magazine, Moffat said he was not
allowed, per the advice of his lawyer, to discuss his relationship with Chiesi,
one of the central figures in an insider trading scandal that led to the
arrests of almost two dozen people from the financial and tech industries.
When told that Fortune planned to include the affair with
Chiesi in the article, Moffat responded by saying: "Everyone wants to make
this about sex. Danielle had an extensive network of business people. And she
added clarity about what was going on in the business world. ... I know in my
heart what this relationship was about: clarity in the business environment."
Moffat was arrested after being caught on federal wiretaps
giving information to Chiesi, who at the time was a portfolio manager at hedge
fund New Castle. Moffat, who at the
time of his arrest was senior vice president and group executive of IBM's
$20 billion Systems and Technology Group, talked to Chiesi about Advanced Micro
Devices' plans to spin off its chip manufacturing business in a joint deal with
an Abu Dhabi investment company. AMD
last year spun off the business, creating Globalfoundries.
Moffat also gave Chiesi confidential information about IBM
finances, Lenovo finances and IBM's pursuit
of Sun Microsystems.
He resigned from IBM soon
after his arrest.
In March, he pleaded
guilty to one count each
of securities fraud and conspiracy. Moffat, who at
one time was considered a possible successor to current IBM
CEO Sam Palmisano, is expected to be
sentenced later this year to at least six months in prison.
In the Fortune magazine story, Moffat is described as
"emotional, repentant, and chastened," weeping as he told the reporter of the
embarrassment he brought to his family, IBM
and his colleagues. He also talked about what he lost because of his arrest,
including $65 million in stock options and pension that he would have collected
when he retired at age 60.
"The biggest thing I've lost is my reputation," he told
Chiesi and Raj Rajaratnam, founder and managing partner of the
hedge fund Galleon Group, are the key players in the insider trading scandal.
Both have denied the charges, and both are scheduled to go on trial in October.
Moffat became the 11th
person to plead guilty in
connection with the case. Another tech figure arrested was Rajiv
, a former executive with Intel's treasury group. Goel, who no longer
is with the company, pleaded guilty in February to charges involving the leaking
of information about Intel and Clearwire to Rajaratnam.
Chiesi also is accused of getting information from unnamed
sources. Several publications have said that Hector Ruiz, former CEO
of AMD, was one of those people. The Fortune
article also names Ruiz as someone who spoke with Chiesi.
Ruiz has not been charged with a crime, though the Fortune
story says he is under investigation by federal authorities in connection with
his dealings with Chiesi.
After news reports linking his name with Chiesi, Ruiz
in November 2009 as chairman of Globalfoundries' board.