James McDermott (defendant), the president, CEO, and chairman of a New York City investment bank, had an extramarital affair with Kathryn Gannon (defendant), an adult film star. During the course of the affair, McDermott made numerous stock recommendations to Gannon. Unbeknownst to McDermott, Gannon was also having an affair with Anthony Pomponio (defendant) and passing the stock tips on to him. The United States (plaintiff) charged McDermott, Gannon, and Pomponio with conspiracy to commit insider trading and the substantive offense of insider trading. McDermott and Pomponio were tried together. At trial, the prosecution relied primarily on circumstantial evidence linking telephone conversations between McDermott and Gannon with the trading activities of Gannon and Pomponio. McDermott was convicted on all counts, and he appealed.