IBM's former server chief, Robert Moffat, has been jailed for six months after pleaded guilty in March to charges of conspiracy to commit securities fraud in a case connected to an insider trading scandal.
The charge carried a potential penalty of five years in prison.
Moffat was among a number of technology executives to plead guilty in a case involving illegal trades that generated millions of dollars in illicit profits. Ten others have already pleaded guilty in connection with the case, including Rajiv Goel, formerly Intel treasury's managing director of investments.
Moffat and Goel appeared in court with three Wall Street traders including Raj Rajaratnam, founder of Galleon Group and Danielle Chiesi, a portfolio manager New Castle Funds.
Chiesi and Rajaratnam allegedly tapped into a network of high ranking corporate executives and insiders, including Moffat, to obtain confidential details about quarterly earnings and takeover activity of companies like Intel, Google, Sun Microsystems, Akamai Technologies, Sprint Nextel and Advanced Micro Devices, according to a court document filed by the US Securities and Exchange Commission in October 2009.
Moffat, formerly senior vice president of IBM's Systems and Technology Group, allegedly leaked insider information about IBM considering acquiring Sun to Chiesi. Chiesi allegedly made trades on behalf of New Castle Funds based on the tips and generated about $1 million in illegal profits.
Chiesi worked along with Rajaratnam, who made close to $25 million in illegal profits, according to prosecutors.
Moffat was placed on a leave of absence shortly after he was arrested in October 2009 and his employment with the company ended shortly afterwards.
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