Former-IBM executive claims he was “played” by mistress in insider trading case

19 August 2010

A former executive at technology firm IBM, who was once considered for the role of CEO, has claimed he was “played” by a mistress to provide details of data used to inform insider trades.

The legal team representing Robert Moffat submitted papers to a US court stating that his “intimate and personal relationship” with Danielle Chiesi, a trader at New Castle Funds, led to the tips being provided.

Mr Moffat pleaded guilty to charges of conspiracy and securities fraud earlier in the year as one of numerous persons involved in an alleged insider trading ring within the Galleon Group.

Ms Chiesi has pleaded not guilty as part of a different trial to Galleon Group co-founder Raj Rajaratnam, who has also filed a not-guilty plea.

Papers filed in the court by the Mr Moffat’s legal team, which were quoted by Bloomberg, said: “Ms. Chiesi was not the passive recipient of information from Mr Moffat. To the contrary, she manipulated or 'played' him to obtain information she could use to New Castle’s advantage.”

“Bob’s personal relationship with Ms. Chiesi unfortunately led him to lose sight of the principles that he had lived by.”

Mr Moffat is due to be sentenced on September 13th.

By Jim Ottewill

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