Vulnerabilities / Threats

7/7/2010
01:17 PM
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Fallen IBM Exec Merely Sought 'Business Clarity'

Bob Moffat says he was motivated by a lust for information, not money or sex, when he struck up affair with alleged co-conspirator.

Former IBM senior VP Bob Moffat said his affair with alleged inside trader Danielle Chiesi was motivated not so much by sex as it was his desire to know "what was going on in the business world."

Moffat, in a bizarre admission to Fortune magazine, said the tech industry pillow talk he exchanged with Chiesi was the main motivation behind their romantic liaisons.

"Everyone wants to make this about sex," Moffat said in an interview published by Fortune on Tuesday. "Danielle had an extensive network of business people. And she added clarity about what was going on in the business world," Moffat said.

"I know in my heart what this relationship was about: clarity in the business environment," he added.

Moffat earlier this year pled guilty to one count of conspiracy and one count of securities fraud. He admitted feeding confidential IBM information to Chiesi. Prosecutors allege that Chiesi in turn gave the information to her bosses at investment firm New Castle Funds. Moffat has said he did not profit financially from the arrangement.

Among other things, Moffat was caught on tape informing Chiesi of AMD's plans to spin off its chip manufacturing arm into a separate company, to be called Foundry, which would be partly financed by investors from Abu Dhabi.

Moffat, who ran IBM's $19 billion Systems and Technology group and was once seen as a possible successor to CEO Sam Palmisano, is scheduled to be sentenced later this year. Reports suggest he's likely to spend about six months in jail.

Chiesi has pled not guilty to securities charges. Moffat, Chiesi, and several alleged accomplices from the tech and investment industries were arrested last October.

Also charged with a variety of securities-related crimes were Raj Rajaratnam, of Galleon Management, Mark Kurland, of New Castle Funds, Anil Kumar, of consulting firm McKinsey, and Intel Strategic Investments director Rajiv Goel.

Authorities fingered Galleon's Rajaratnam as mastermind of the ring.

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