NEW YORK — A tearful former IBM executive was sentenced to six months in prison yesterday for his role in what prosecutors call the biggest hedge fund insider trading case in history.
Robert Moffat, 54, was also ordered to pay a $50,000 fine by U.S. District Judge Deborah A. Batts following his guilty plea earlier this year to securities fraud and conspiracy to commit securities fraud.
“White collar crime is just as destructive to our social fabric as the crimes of drugs and violence,” the judge said as she sentenced Moffat at the top of a federal sentencing guidelines range that stretched from no jail time to six months in prison.
The sentence came in a case that resulted in charges against 21 defendants last fall. Already, a dozen people have pleaded guilty. Charges against Moffat drew increased attention because he was a high-level executive at Armonk, New York-based International Business Machines Corp., where he once was considered a candidate for chief executive officer during a three-decade career.
Authorities say profits from illegal trades topped $50 million, though Moffat’s tips resulted in no profits and he received no money, lawyers on both sides agreed.
Instead, Moffat was motivated by a desire to impress fellow defendant Danielle Chiesi, with whom he had an affair, his lawyers acknowledged in court papers prior to the sentencing. They said she “played” him by using their intimate relationship to get confidential information. She has pleaded not guilty to charges in the case.
Before he was sentenced, Moffat apologized, saying he “made a terrible mistake in judgment which will haunt me the rest of my life.”
Prosecutors asked for the six-month sentence. They said his crimes were committed out of a misguided belief he could never be caught.
The defense asked for probation.