Friday, September 17, 2010

Moffat’s True Crime

Earlier this week Bob Moffat (formerly of IBM) was sentenced to six months in jail and a $50,000 fine for his role in the Galleon Insider Trading Scandal, to which he pleaded guilty earlier this year.

Have I written enough about this topic yet? I don’t think so.

Based on news reports, Moffat did indeed appear to be contrite as he wept in court, taking responsibility for his actions and noting that he made terrible mistakes in judgment.

Moffat was respected within IBM because his position commanded it. In some circles he was revered for restoring flailing business units to profit, and in others he was feared. He had a reputation for cutting budgets and expense – including headcount – to the bone. Thousands of employees received those pink slips in the form of a 30-plus-page package with a cover letter signed by Moffat himself that begins, "As your business leader, I make decisions every day with the objective that IBM remains at the forefront of its competitors.” (Hmmm... not every day.)

Is Moffat’s true crime that he had a personal relationship with Danielle Chiesi? He has a convenient explanation for this, saying it wasn’t about sex but about, “Clarity in the business environment”. So maybe Moffat’s true crime is that he passed along inside information to Chiesi? That is indeed what he will serve six months in jail for.

No, in my opinion Moffat’s true crime was betrayal – betrayal of the tens of thousands of employees and ex-employees of IBM who worked for him, trusted him, and some who would even lay down on the railroad tracks for him – even when their jobs were being cut.

Yes, I suppose Moffat now knows what it feels like to lose his job after thirty years of loyalty and hard work for the same company. The difference between his job loss and the losses thousands of others suffered is that Moffat created his own demise, while the employees that worked for him lost their jobs due to no fault of their own.

Is six months in jail and $50,000 dollars punishment enough?


Anonymous said...


Please don't waste good energy on this matter. You were betrayed along with many others. However there is evil out there and we all get hurt by it from time to time.

We need to use our energy to make the best of what we have, to treat others in a way that will enable us to sleep well at night and look forward to each day.

Take care,

Anonymous said...

I agree with Peter - past time to move on. Moffat is no more guilty in the lay-offs of thousands than many other executives, including those still running the business - and being paid huge salaries to keep stockholders satisfied. And it's not just your former employer, unfortunately it's businesses across the land.

Maurice Frank said...


I agree that what was done was wrong, and a betrayal.

I also hope that you can find a way to release the pain you have experienced, instead of clinging to it. This would not condone what happened, it would only stop harming you even more.

I wish you well.


Colette said...

Thank you for all of your sentiments. What a great group of readers you are!

Liza said...

I agree with the commenters above...except that having experienced the final lines of your post verbatim, (except that I WAS HR and the person delivering the news was the one using the Kleenex) I know that we are only human. After a living through a situation like this, anger does percolate up sometimes. Let it out if you must, then move on. There is so much more that is good out there. Though I may be a lot poorer financially, I'm convinced that I'm a better person for going through the exercise.

Anonymous said...

This gut is going to come out of in security jail after three months (time off for good behavior etc) and waltz straight into another job.
These people do not operate on the same planet as the rest of us.
Personally I hope he sinks like a brick (although I feel sorry for his family and the hurt he caused them) but somehow I doubt it.

Colette said...

Liza, and I was too often the manager delivering the news. The kleenexes were for all of us.

Jim said...

Hi Colette,
I think the most disturbing part of this whole twisted situation is the fact that he will not start serving his time until June of next year (2011). It's sad to think that the justice system should treat some people so different than others.


Anonymous said...

I just read that he will now be allowed to start his jail term earlier, so that he can attend his sons graduation. I wonder how many IBMers would have wanted that option, to end a few months later, so that they weren't denied the some options just because they were being let go just a few months ahead.

Anonymous said...

We are clearly talking about a man here lacking any integrity and morals. Not only was his true crime BETRAYAL to the corporation he worked for, but also BETRAYAL to the people who should be most important to him, his own family. Very, very sad....

Anonymous said...


I agree with the other posters.

Try to get past the pain of the betrayal and focus your energy on your friends, family, and people you can trust.

This type of behavior occurs in business leaders and politicians who allow their power to go to their heads.

As far as his sentence being a just pusishment, I don't know. He did not profit in dollars from the inside information he disclosed but he did hurt shareholders of IBM.

Take care and continue posting "When Fridays Were Fridays"

Colette said...

Jim and anonymous, yes -- I don't expect that the 'average' criminal would be allowed to pick the start time for their jail sentence.

Mike, thanks for pointing out that he didn't profit (at least not monetarily), but he sure did take advantage of his position.

Colette said...
This comment has been removed by the author.
Colette said...

In case anyone missed the bit about the trial date, here's the recap: Moffat originally requested to push his jail date out to June of next year, so he could attend his son's graduation. His most recent request was to begin serving his jail sentence earlier, so he could be out before his son's graduation.One report here: Bloomberg article

Anonymous said...

Clearly all the people here have never made a mistake. Or let me ask, who did not have information (for example, about impending resource actions) and NEVER told anyone that was not supposed to know - like your significant other. The difference here is that the position meant the information was more valuable to others - but the 'crime' is the same.

Colette said...

Anonymous -- everyone makes mistakes. But was this really the same as someone telling their significant other what was going on at work? If he had told his wife the same secrets I don't think he'd be in this mess.

Anonymous said...

If his wife happened to be a Financial Analyst it would have been the same - how about if the spouse worked for HP or Oracle. Did he have bad judgement on who he was intimate with and what he told her? Absolutely! Did he betray IBM? I've yet to see that anything he did had a negative impact on IBM. Again, I don't condone his actions, but it seems that it's easy to say how bad he was since it was someone in a high level -- and we all like to see the mighty the fact is that what he did was only in the papers because of who he is - if this was a first line manager, people on this list would not be saying anything.

Colette said...

Anonymous - I agree that if he were a first line manager there would be less to say. But he wasn't. With his job came more responsibility.

Anonymous said...

"Is six months in jail and $50,000 dollars punishment enough?"

I presume this was a rhetorical question. Of course not. That's not even a slap on the wrist - that's a love tap.

To those that say Moffat is no more guilty that lots of other execs for the IBM layoffs - you clearly don't understand that Moffat was one of three execs that laid out the master plan. Pretty much anyone else involved was a messenger.

Moffat is clearly responsible for both the destruction of the company (at least what IBM was) and its' betrayal.

When the economy finally turns the corner, watch for a mass exodus of skilled professionals from IBM.

I firmly believe the company is running on borrowed time. I am a long-term IBMer, but can no longer say that with pride. Many think that Lou killed what everyone knew as IBM, but it's really Sam and his men (e.g. Moffat) that drive the death spike into the heart and soul of the company - it's people.

Anonymous said...

I'm with you dude. I'd be outa here given half a chance.