Tuesday, September 14, 2010
Before his arrest, Bob Moffat had it all - stand out student in college, led to an "extraordinary career with IBM, a happy family. He had it all. And then he threw it all away when he became involved with the Galleon crew. From today's Bloomberg report on the latest Galleon sentencing:
“Why the defendant betrayed the only employer he has had for his entire career has not been addressed,” Batts said. “His astounding breach of his fiduciary duty to his employer is why he is here.”
I think I know why. He didn't make any money. No, that's true. But it's a familiar story. According to the pre-sentencing report (Moffat - PSR):
"My actions were not driven by greed or the desire to profit by disclosing this information. In fact, I did not make any money as a result of what I did. In the end, I believe my actions stemmed from misplaced trust, letting 'my guard down' and a misguided desire to appear important and knowledgeable to share Ms. Chiesi that I was 'in the know' about important matters." Bob's mistakes were real and he is deeply sorry for them, but it must also be understood that his motives were not venal and not profit-driven. Perhaps his ego got in the way by making him want to impress someone with whom he had become intimate. Perhaps he just wanted to seem knowledgeable and worldly. This case is tragic precisely because Bob Moffat's actions are so inexplicable and because he threw away what he had spent so much of his life working for -- in exchange for non-pecuniary benefits that were, at most, fleeting and insubstantial.
It's just another reminder that if you're handing out tips on inside information, you don't actually have to "profit" (as in receive cash) for those tips to be liable. Moffat got six months in jail and lost it all today.