For a company that has always prided itself on the highest standards of corporate ethics, IBM is facing one of its hardest decisions: how to deal with the accusation that one of its most senior executives illegally passed on inside information.

Robert Moffat, a 31-year veteran and one of the most trusted lieutenants of Sam Palmisano, IBM’s chief executive officer, was among six people charged earlier this month in the insider trading case centred on the Galleon hedge fund. His lawyer has said he did not pass on any illegal information and pointed out that he is not accused of having tried to profit from the trades at the centre of the complaint.