Robert Moffat, a former senior executive of International Business Machines Corp whose phone conversations were recorded by the FBI in the Galleon hedge fund insider trading probe, pleaded guilty on Monday to securities fraud and conspiracy charges.

Moffat, 53, was arrested and charged last October 16 along with principal defendants, Galleon founder Raj Rajaratnam and former New Castle Funds LLC trader Danielle Chiesi, in what U.S. prosecutors have described as the biggest hedge fund insider trading case in the United States.

The former IBM executive admitted to the charges regarding confidential information he gave to Chiesi during a plea proceeding in Manhattan federal court in New York before magistrate judge Frank Maas. He is the 11th defendant to plead guilty in the case.

Prosecutors said he had access to inside information regarding IBM's licensing of a deal involving Advanced Micro Devices Inc that he passed on to Chiesi, a friend, in August 2008. In court he also referred to earnings information about Lenovo Group Ltd <0992.HK>, while he was a nonvoting member of that company's board and details of IBM server sales.

Mr Moffat accepted responsibility today for his conduct in improperly disclosing confidential information to Danielle Chiesi, Moffat's lawyer Kerry Lawrence said in a statement. It is also important to understand that he never engaged in any trading in connection with the transactions involving AMD, Lenovo or IBM, and received no money or other financial benefit from anyone relating to those transactions.

Moffat was the senior vice president of IBM's systems and technology group and once seen as a possible candidate for the IBM chief executive job. He was placed on leave on October 19 and is no longer with the company, IBM said.

His guilty plea was expected to be formalized by U.S. District Judge Naomi Buchwald at a later date. Sentencing was scheduled for July 26 when Moffat will face up to 6 months in prison.

Lawrence said there was no loss caused by Moffat, who did not sign a cooperation agreement with prosecutors.

I provided to Ms Chiesi information that was confidential and not public, Moffat said during the plea proceeding, his voice trembling at times. I also knew I owed a duty to my employer, IBM. I knew that it was wrong.

Some 21 traders, lawyers or executives were arrested or charged last October 16 and November 5, some of them Rajaratnam's friends and business associates or former Galleon employees.

Eight defendants have signed cooperation agreements with federal prosecutors and may be called upon to testify at Rajaratnam and Chiesi's criminal trial, which was scheduled to start on October 25. Both have since asked the judge for separate trials.

Prosecutors said that, in August 2008, Chiesi and Moffat discussed a confidential business transaction that AMD was negotiating with investors from Abu Dhabi. IBM would be granting a license to an entity to be spun off by AMD.

Toward the end of a phone call, according to the complaint, Chiesi asked about the timing of the deal involving AMD and Moffat replied, six to eight weeks from my meeting.

When asked the chances that the deal would fall through, Moffat replied, Zero ... I see no way that it doesn't get done.

The cases are USA v Rajaratnam and Chiesi, U.S. District Court for the Southern District of New York, No. 09-01184 and USA v Robert Moffat, No 09-mj-02307.

(Reporting by Grant McCool; additional reporting by Edith Honan and Andre Grenon)

Raj Rajaratnam Ibm Insider trading Lenovo