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May 25, 2000 10:05am
Porn Star Arrested in Insider Trading Case
Source: Reuters

(VANCOUVER) -- A pornographic film star wanted by U.S. authorities in connection with a Wall Street insider trading case was scheduled to appear in court on Thursday following her arrest by Canadian police.

Kathryn Gannon, also known as Marylin Star, was arrested without incident on Wednesday at the Vancouver home where she had been staying since fleeing the United States, the Royal Canadian Mounted Police said.

Gannon, who is Canadian, is alleged to have received sensitive merger information from James McDermott Jr., with whom she was having an affair. At the time McDermott was the head of the investment banking firm Keefe, Bruyette & Woods Inc.

U.S. prosecutors alleged that Gannon shared McDermott's tips with Anthony Pomponio, a New Jersey businessman with whom she was also involved, and that the pair made more than $170,000 in illegal profits.

Gannon, 31, McDermott, 48, and Pomponio, 45, were indicted in January. McDermott was convicted in January of conspiracy and fraud. Pomponio was convicted of conspiracy, insider trading and perjury.

Gannon, was scheduled to appear in British Columbia Supreme Court in Vancouver on Thursday on an extradition request by the United States.

Gannon was recently married to Vancouver stock promoter Michael Gilley, and had been staying in a condominium near Vancouver's downtown.

Gannon appeared in dozens of adult films and in a sexually graphic Internet site, but the judge in McDermott's trial barred information about the nature of the films from being used as evidence on the grounds it would prejudice the jury.

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