NEW YORK (Reuters) - IBM <IBM.N> has replaced senior executive Robert Moffat as the head of its hardware division, saying he left the company two weeks after he was arrested in a high-profile insider trading scandal.

Moffat, once widely seen as a possible successor to IBM Chief Executive Sam Palmisano, was placed on a leave of absence on October 19 following his arrest in the largest-ever insider trading scheme involving a hedge fund.

He is being succeeded as senior vice president of IBM's systems and technology group, the world's biggest maker of mainframe computers, by Rod Adkins, a 28-year company veteran who is IBM's highest-ranking black executive.

Moffat was charged with passing on insider information to a hedge fund, the Galleon Group.

"Bob Moffat, who had been placed on leave of absence as a result of a U.S. federal investigation into his personal activities, is no longer an employee," IBM spokesman Edward Barbini said on Friday.

He declined to elaborate, saying IBM does not discuss "personal issues" of current or former employees.

Moffat's attorney declined comment.

Adkins, 51, has served in a variety of management positions across the company, including general manager of IBM's PC division, which it has since sold to China's Lenovo Group.

IBM named him interim head of the hardware group after Moffat was put on administrative leave.

(Reporting by Jim Finkle and Anupreeta Das; editing by Andre Grenon)