Robert Moffat, a senior vice president at IBM's systems and technology group, is said to be on leave following his arrest on Friday for the part he allegedly played in a hedge fund insider trading scam.
Edward Barbini, spokesperson for IBM, told Reuters: "In view of a US federal investigation into his personal activities, Mr. Moffat has been placed on temporarily leave of absence and is no longer serving as an officer of IBM."
He is accused of giving out information about the company before it released its quarterly results along with information on Sun Microsystems and AMD, which IBM had been negotiating with.
His lawyer Kerry Lawrence confirmed to Reuters he was pleading innocent and had been released on bail.
"There's neither any evidence or claim that he profited in connection with the trades referenced in the complaint," said Lawrence. "He did not."
Moffat was a key figure overseeing IBM's flagship department which develops business hardware including servers. His responsibilities will be temporarily taken over by Rodney Adkins.
IBM couldn't be reached for further comment.
