IBM Replaces Exec in Inside-Trading Case

Armonk, N.Y. (TheStreet) -- Bob Moffat, the IBM(IBM Quote) executive charged with insider trading in the Galleon case, has been replaced as head of the firm's key Systems and Technology Group.

A statement on the company's internal Web site Friday informed employees that Moffat had been replaced by 28-year IBM veteran Rod Adkins. Moffat, who has been touted as a possible successor to IBM CEO Sam Palmisano, was placed on leave earlier this month after he was accused of leaking confidential information about the company's earnings and dealings with its partners.

"Rod Adkins, who was named acting head of IBM's Systems and Technology Group on October 19th, has been appointed senior vice president, STG," said the statement. "Bob Moffat, who had been placed on leave of absence as a result of the U.S. Federal investigation into his personal activities, is no longer an employee of IBM."

IBM spokesman Doug Shelton refused to provide any additional information surrounding Moffat's departure when contacted by TheStreet. "We have a policy that we do not comment on the personal issues of current or former employees," he said.

The fallout from the Galleon insider trading case continues. Chipmaker Intel(INTC Quote), which is embroiled in the scandal surrounding alleged leaks to Raj Rajaratnam's Galleon Group, has hired San Francisco-based law firm Orrick Herrington & Sutcliff to conduct an investigation, according to Bloomberg.

According to a criminal complaint filed in a federal court in Manhattan, Rajiv Goel, a managing director in Intel's treasury group, was charged on Oct. 16 for passing tips to Rajaratnam about a firm that Intel invested in, Bloomberg reported.

Intel and IBM are among several companies, including AMD(INTC Quote) and Moody's(MCO Quote), whose names have surfaced during the ongoing Galleon scandal.

Shares of IBM, which recently raised its 2009 profit outlook, closed down $2.26, or 1.84%, at $120.61 Friday. The decline mirrored the broader retreat in tech stocks that saw the Nasdaq decline 2.50%.

-- Reported by James Rogers in New York