IBM’s Moffat Gets Wish to Leave Prison Before Son Graduates

Robert Moffat, the former International Business Machines Corp. senior vice president who pleaded guilty to leaking tips in the Galleon Group LLC case, was granted his wish to begin serving his term earlier so he will be out of prison by his son’s college graduation in May.

Moffat, who was sentenced to six months in prison for his role in the insider-trading scheme, persuaded a federal judge in New York to let him begin his sentence eight months sooner than scheduled. He’s giving up his freedom before the Thanksgiving and Christmas season to be home before his son graduates.

“Mr. Moffat has discussed this matter with his family and they collectively feel that the pendency of a prison sentence creates substantially more stress than the benefit of spending the holidays together,” his lawyer, Kerry Lawrence, wrote in a Sept. 14 letter to U.S. District Judge Deborah Batts in Manhattan. Her approval was noted in the court docket yesterday.

Moffat, 54, admitted he leaked information to Danielle Chiesi, a former consultant for New Castle Funds LLC and a defendant in the Galleon Group case.

Batts initially directed Moffat to surrender to prison authorities on June 30, 2011, specifically so that he could attend his son’s graduation. He is now scheduled to start his term Nov. 5 and may be out before May 5, depending on whether he earns early release for good behavior.

‘For Graduation’

“The Moffats believe strongly that the entire family would be better off if Mr. Moffat were able to complete serving his sentence and be home in time for graduation,” Lawrence wrote in her letter to the court.

When Moffat pleaded guilty in March to securities fraud and conspiracy, he said he gave tips to Chiesi about IBM, Lenovo Group Ltd. and Advanced Micro Devices Inc. from August to October in 2008. He is one of 12 people who have pleaded guilty in two overlapping insider-trading cases related to Galleon Group and New Castle Funds. Nine others still face charges.

Moffat said he had an “intimate relationship” with Chiesi, 44, who was arrested along with Galleon Group co-founder Raj Rajaratnam. Moffat’s lawyers said Chiesi manipulated their client to obtain the information.

His lawyers sought a probation term instead of prison, saying Moffat hadn’t profited financially from his crimes.

Batts directed Moffat to begin paying a $50,000 fine after he is released from prison.

The case is U.S. v. Moffat, 10-cr-00270, U.S. District Court, Southern District of New York (Manhattan).

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