|By Maureen O'Gara||
|October 18, 2009 09:45 AM EDT||
The United States government has accused Robert Moffat, IBM’s server chief, the guy who was negotiating to buy Sun, with betraying Sun’s financial position to Danielle Chiesi, an employee of New Castle Partners, a New York hedge fund, so she could trade on the insider information.
Moffat knew what Sun’s numbers were going to be because he was one of the nine IBMers doing due diligence at Sun this past January.
In a wire-tapped phone call Chiesi made to an unidentified person now cooperating with the government’s investigation she said, “IBM is looking at it as a takeover. The only reason my guy would know that is because it’s his deal. Like, he’s in bed with them….You see what I mean…not because he’s just speculating.”
The news that IBM was negotiating to buy Sun didn’t leak to the Wall Street Journal and hence to the world for another two months.
Armed with the foreknowledge allegedly provided by Moffat that Sun was going to beat the Street – top and bottom – when it reported its December ’08 quarter, New Castle bought Sun shares just hours before Sun posted its numbers on January 27 and made a $900,000 killing on the deal.
The government says Moffat had practice slipping Chiesi insider financial information. When the global economy started melting down last year, he had dinner with her in early September, before IBM’s quarter closed, and reassured her that IBM would pull it out. According to a taped phone call with an unidentified affiliate of New Castle, she said, “He’s saying, you know, [IBM’s] zSeries looks really good. He’s saying that everything looks fine but…it comes down to the…final last week. But he thinks right now that they are on track. As of right now he’s not even worried a little bit, I mean, we think we can beat the numbers this quarter.” Chiesi apparently held onto her position in IBM’s stock.
Then again this past January, when IBM was due to report the results of its December quarter and Chiesi had spoken with Moffat New Castle covered a short position in IBM stock and began picking up more shares.
The government tap found her explaining to the person who’s now a government witness, “I’m buying IBM going into the print,” Wall Street parlance for IBM posting its numbers. “If I wasn’t closer to the situation I’d be, I would so short this fucking thing. But I’m thinking they could beat, and they really could guide up….You know, my guy said easily they could, they could add 30 cents to the bottom line. Easily, easily. That’s what he says, to the bottom line in ’09….I don’t think anybody is talking about a beat this quarter.”
The government’s complaint notes that on January 20 IBM’s Q4 earnings beat analyst expectations by 25 cents and that it expected to do 27 cents better this year than last.
The FBI figures New Castle was up about $500,000 on Moffat’s information.
Three months later Chiesi flat out asked Moffat what IBM’s quarter looked like. She was apparently told the company would miss on revenues by 7%, “miss the short-term signings but make total signings” and earnings per share would be “good,” which is exactly what happened on April 20.
Having made money on Sun’s financial results once, Chiesi got her “ass kicked,” she’s reported saying, on Sun stock when Oracle unexpectedly waltzed in with a $9.50-a-share bid to acquire the company on April 20, supporting the widely held perception that IBM was dumbfounded at the move.
Chiesi was short the stock allegedly because Moffat had told her Sun’s revenues would be down 27% when it reported its March quarter. The Street only estimated it would be down 17%. She was also gambling on Moffat telling her if IBM was going to buy Sun. She hadn’t reckoned on Oracle or Moffat not knowing what was going on.
Moffat is charged with three counts of conspiracy to commit securities fraud, one each for Sun and IBM and the third for AMD, where Moffat in his capacity as head of IBM Microelectronics was in on AMD’s negotiations to spin off its factories into a joint venture with the government of Abu Dhabi. IBM would have to license the venture some of its technology.
In the AMD case they seem to have proven inept conspirators and Chiesi even had a pipeline into AMD in the form of a chatty unidentified AMD executive who apparently hasn’t been charged with any crime. For all the reported discussions between Moffat and Chiesi of the deal’s structure, terms, voting rights, dilution, government approvals, management and timing of the announcement, the government thinks New Castle didn’t profit from its trades in AMD stock “due in part to a global financial crisis that precipitated a broad decline in stock markets in or about September and October 2008.”
New Castle had bought a swat of AMD at $5.44 and another at $4.50 pre-announcement and didn’t begin selling until the price had sunk to $4.25. However, the government’s not sure that New Castle didn’t avoid certain losses by selling put options the day before the announcement, which the hedge fund knew was set for October 7, 2008.
The FBI says Chiesi had been worried that she “would make so much money that her trading might the attention of regulators” so maybe she was relieved in a way.
By her own admission she would never have dabbled in AMD stock without having an inside track. She told New Castle president Mark Kurland that “Unless you were on the phone with [the AMD executive] and had Moffat at you house last night, who the fuck would be buying it honestly.” And to the alleged kingpin of the scheme, billionaire hedge fund manager Raj Rajaratnam, now out on $100 million bail, she was overheard to say she “wouldn’t of touched [AMD’s stock] with a fucking 10-foot pole” if she “wasn’t close to the company.”
According to the US Attorney Moffat is looking at doing five years in jail and paying a fine of $250,000 or twice his gross gain or loss. His playmates are looking at worse.
It’s unclear from either of the two complaints that the government filed with the federal court in New York Friday how exactly Moffat was to benefit financially from the intrigue.
He was the only one of the six people in the ring charged Friday to turn himself in. They went and arrested the others. It’s unclear whether he’s still working for IBM, the company not being exactly forthcoming right now. His bio had disappeared from IBM’s site by early Saturday morning. IBM executives, by the way, are supposed to be well-compensated.
|MADAME P J BAILEY 10/22/09 11:37:33 AM EDT|
Moffat & IBM CEO Palmisano made parallel IBM stock trades on 08-21-08. Palmisano cleaned out the till on August 28, 2009. Will Palmisano's arrest be next ? Visit - ibmTheWidowMaker com
We heard for many years how developing nations would be able to develop mobile-phone networks quickly, perhaps even leapfrog developed nations, because their lack of traditional, wired networks would not inhibit them from deploying the new technology. Now there is talk of history repeating itself with the Industrial Internet--a key aspect of the emerging Internet of Things. For example, Guo Ping, Deputy Chairman of the Board of Chinese electronics giant Huawei, said in a recent report from the World Economic Forum, "The Industrial Internet will afford emerging markets a unique opportunity ...
May. 5, 2015 05:00 PM EDT Reads: 668
Avnet, Inc. has announced that it ranked No. 4 on the InformationWeek Elite 100 – a list of the top business technology innovators in the U.S. Avnet was recognized for the development of an innovative cloud-based training system that serves as the foundation for Avnet Academy – the company’s education and training organization focused on technical training around top IT vendor technologies. The development of this system allowed Avnet to quickly expand its IT-related training capabilities around the world, while creating a new service that Avnet and its IT solution providers can offer to their...
May. 5, 2015 04:15 PM EDT Reads: 913
Ayla Networks, whose agile Internet of Things (IoT) platform makes it easy for manufacturers to deliver secure, connected products, today announced it has been included in the list of "Cool Vendors" in the Internet of Things report by Gartner, Inc. “Gartner knows how important it is that manufacturers of all kinds of products have the right IoT solution to help turn their products into connected ‘things,’” said David Friedman, CEO and co-founder of Ayla Networks. “The market for Ayla’s IoT platform has accelerated dramatically this year compared to last year. Today’s largest manufacturers ar...
May. 5, 2015 02:00 PM EDT Reads: 478
SYS-CON Events announced today that B2Cloud, a provider of enterprise resource planning software, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. B2cloud develops the software you need. They have the ideal tools to help you work with your clients. B2Cloud’s main solutions include AGIS – ERP, CLOHC, AGIS – Invoice, and IZUM
May. 5, 2015 12:00 PM EDT Reads: 4,482
The Internet of Things Maturity Model (IoTMM) is a qualitative method to gauge the growth and increasing impact of IoT capabilities in an IT environment from both a business and technology perspective. In his session at @ThingsExpo, Tony Shan will first scan the IoT landscape and investigate the major challenges and barriers. The key areas of consideration are identified to get started with IoT journey. He will then pinpoint the need of a tool for effective IoT adoption and implementation, which leads to IoTMM in which five maturity levels are defined: Advanced, Dynamic, Optimized, Primitive,...
May. 5, 2015 11:45 AM EDT Reads: 1,156
SYS-CON Events announced today that MangoApps will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY., and the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. MangoApps provides private all-in-one social intranets allowing workers to securely collaborate from anywhere in the world and from any device. Social, mobile, and easy to use. MangoApps has been named a "Market Leader" by Ovum Research and a "Cool Vendor" by Gartner...
May. 5, 2015 11:00 AM EDT Reads: 4,396
The world's leading Cloud event, Cloud Expo has launched Microservices Journal on the SYS-CON.com portal, featuring over 19,000 original articles, news stories, features, and blog entries. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. Microservices Journal offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. Follow new article posts on Twitter at @MicroservicesE
May. 5, 2015 11:00 AM EDT Reads: 2,937
Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 16th Cloud Expo at the Javits Center in New York June 9-11 will find fresh new content in a new track called PaaS | Containers & Microservices Containers are not being considered for the first time by the cloud community, but a current era of re-consideration has pushed them to the top of the cloud agenda. With the launch of Docker's initial release in March of 2013, interest was revved up several notches. Then late last...
May. 5, 2015 11:00 AM EDT Reads: 3,925
There is no doubt that Big Data is here and getting bigger every day. Building a Big Data infrastructure today is no easy task. There are an enormous number of choices for database engines and technologies. To make things even more challenging, requirements are getting more sophisticated, and the standard paradigm of supporting historical analytics queries is often just one facet of what is needed. As Big Data growth continues, organizations are demanding real-time access to data, allowing immediate and actionable interpretation of events as they happen. Another aspect concerns how to deliver ...
May. 5, 2015 11:00 AM EDT Reads: 5,801
WebRTC defines no default signaling protocol, causing fragmentation between WebRTC silos. SIP and XMPP provide possibilities, but come with considerable complexity and are not designed for use in a web environment. In his session at @ThingsExpo, Matthew Hodgson, technical co-founder of the Matrix.org, discussed how Matrix is a new non-profit Open Source Project that defines both a new HTTP-based standard for VoIP & IM signaling and provides reference implementations.
May. 5, 2015 10:45 AM EDT Reads: 4,409
So I guess we’ve officially entered a new era of lean and mean. I say this with the announcement of Ubuntu Snappy Core, “designed for lightweight cloud container hosts running Docker and for smart devices,” according to Canonical. “Snappy Ubuntu Core is the smallest Ubuntu available, designed for security and efficiency in devices or on the cloud.” This first version of Snappy Ubuntu Core features secure app containment and Docker 1.6 (1.5 in main release), is available on public clouds, and for ARM and x86 devices on several IoT boards. It’s a Trend! This announcement comes just as...
May. 5, 2015 10:45 AM EDT Reads: 2,252
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, and physical persons. In the IoT vision, every new "thing" - sensor, actuator, data source, data con...
May. 5, 2015 10:30 AM EDT Reads: 5,427
The WebRTC Summit 2015 New York, to be held June 9-11, 2015, at the Javits Center in New York, NY, announces that its Call for Papers is open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 16th International Cloud Expo, @ThingsExpo, Big Data Expo, and DevOps Summit.
May. 5, 2015 10:15 AM EDT Reads: 3,175
SYS-CON Events announced today the IoT Bootcamp – Jumpstart Your IoT Strategy, being held June 9–10, 2015, in conjunction with 16th Cloud Expo and Internet of @ThingsExpo at the Javits Center in New York City. This is your chance to jumpstart your IoT strategy. Combined with real-world scenarios and use cases, the IoT Bootcamp is not just based on presentations but includes hands-on demos and walkthroughs. We will introduce you to a variety of Do-It-Yourself IoT platforms including Arduino, Raspberry Pi, BeagleBone, Spark and Intel Edison. You will also get an overview of cloud technologies s...
May. 5, 2015 10:00 AM EDT Reads: 3,946
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover how hardware commoditization, the ubiquitous nature of connectivity, and the emergence of Big Data a...
May. 5, 2015 10:00 AM EDT Reads: 5,590
SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched. @WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @WebRTCSummit Blog can be bookmarked ▸ Here @WebRTCSummit conference site can be bookmarked ▸ Here
May. 5, 2015 09:45 AM EDT Reads: 3,453
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
May. 5, 2015 09:45 AM EDT Reads: 5,955
In his session at WebRTC Summit, Peter Dunkley, Technical Director at Acision, will look at creating interactive communications via the web by adding messaging, file transfer, and group communication (group chat and audio/video conferencing) into the web experience. He will also discuss potential applications of this technology in areas including B2B, B2C, P2P, and gaming. Peter Dunkley is Technical Director at Acision. He graduated from The University of Edinburgh in 2000 with a BSc (Hons) in Computer Science. After graduation Peter worked on a PSTN switch developing signalling stacks for SS...
May. 5, 2015 09:39 AM EDT Reads: 513
It's time to put the "Thing" back in IoT. Whether it’s drones, robots, self-driving cars, ... There are multiple incredible examples of the power of IoT nowadays that are shadowed by announcements of yet another twist on statistics, databases, .... Sorry, I meant, Big Data(TM), tiered storage(TM), complex systems(TM), smart nations(TM), .... In his session at WebRTC Summit, Dr Alex Gouaillard, CTO and Co-Founder of Temasys, will discuss the concrete, cool, examples of IoT already happening today, and how mixing all those different sources of visual and audio input can make your life happier ...
May. 5, 2015 09:15 AM EDT Reads: 652
What exactly is a cognitive application? In her session at 16th Cloud Expo, Ashley Hathaway, Product Manager at IBM Watson, will look at the services being offered by the IBM Watson Developer Cloud and what that means for developers and Big Data. She'll explore how IBM Watson and its partnerships will continue to grow and help define what it means to be a cognitive service, as well as take a look at the offerings on Bluemix. She will also check out how Watson and the Alchemy API team up to offer disruptive APIs to developers.
May. 5, 2015 09:15 AM EDT Reads: 2,234