April 25, 2000 05:37pm
Jury Deliberates Insider Trade Case
by: Larry Neumeister
(NEW YORK, NY) -- A jury Tuesday began deliberating whether a Wall Street executive helped an X-rated actress and her other lover make illegal stock trades.
In closing arguments, Assistant U.S. Attorney Alex Young K. Oh made repeated mentions of the extramarital affair between porn star Kathryn Gannon and James McDermott Jr., the former chief executive officer at Keefe, Bruyette & Woods.
Afterward, the jury deliberated for two hours before retiring for the day without reaching a verdict.
Oh rejected arguments by defense lawyers that McDermott never gave Gannon inside information about banks about to announce mergers because his $4 million annual salary meant he could just give her cash.
``The evidence has shown that giving cash to Gannon was not enough,'' Oh told the jury in U.S. District Court in Manhattan. ``There was something more to this scheme than just the money.
``Maybe McDermott was trying to impress her. This is a way for him to show her what he did. Maybe it was a macho thing,'' she said.
A day earlier, lawyer Denis J. McInerney had called his client a ``rocket scientist on bank stocks'' who recommended winning stocks to Gannon long before they were put on lists requiring nothing be said about them until mergers were announced.
McDermott, 48, of Briarcliff Manor, and Gannon, 30, are charged with conspiracy and securities fraud in the case along with co-defendant Anthony Pomponio, 45, of North Caldwell, N.J.
Pomponio allegedly traded illegally after he was told the inside information by Gannon, with whom he also was having an affair. Gannon, who has lived in Miami in the past, is a fugitive believed to be in Canada.
Oh told jurors McDermott recommended stocks to ``his lover, Gannon,'' who in turn recommended the stock to ``her other lover, Pomponio.'' Gannon and Pomponio allegedly made $170,000 in illegal profits.
She said the argument that McDermott ``was too rich or made too much money to commit this crime is silly.''
``We already know he was willing to risk his marriage and his job for this affair with Kathryn Gannon,'' Oh said.
The prosecutor said she suspected McDermott thought the affair and the insider trading would never be discovered.
``He never thought that you, anybody, would make that connection between a dancer and an actress in Miami with him,'' she said.