NEW YORK, (Reuters) - U.S. prosecutors Monday
recommended a six-month prison term for Robert Moffat, a former
IBM executive who pleaded guilty in the Galleon hedge
fund insider trading probe.

Moffat, once a candidate to succeed IBM Chief Executive
Officer Samuel Palmisano, is scheduled to be sentenced on Sept.
13 in Manhattan federal court for his role in what prosecutors
describe as the biggest probe of insider trading at hedge funds
in the United States.

The sentence recommendation of six months imprisonment "is
consistent with Moffat's plea agreement" in March, prosecutors
wrote to presiding Judge Deborah Batts.

Prosecutors said Moffat had access to inside information
regarding IBM's licencing of a deal involving Advanced Micro
Devices Inc that he passed on to then New Castle Funds
trader Danielle Chiesi in August 2008.

In court, he also referred to details of IBM server sales
and earnings information about Lenovo Group Ltd while
he was a nonvoting board member.

"As far as the government has determined, his motive was to
help a woman with whom he was having an intimate, personal
relationship," the government's sentencing memorandum said.

It said "he repeatedly engaged in his fraudulent schemes
with Chiesi, knowing full well that she was going to execute
securities trades for a hedge fund -- one that had
approximately $1 billion under management and whose trades
could certainly move the market and have a substantial effect
on the integrity of the stock market."

Chiesi and the case's principal defendant, Galleon hedge
fund founder Raj Rajaratnam, have pleaded not guilty to fraud
and conspiracy charges regarding allegations of insider
trading. They are scheduled to go on trial in January.

Chiesi's boss at the New Castle hedge fund, Mark Kurland,
was sentenced in May to 27 months imprisonment after pleading
guilty to criminal charges in the case.

The case is USA v Moffat, U.S. District Court for the
Southern District of New York, No. 10-00270.
(Reporting by Grant McCool. Editing by Robert MacMillan)