United States Court of Appeals for the Second Circuit
245 F.3d 133 (2001)
James McDermott (defendant), president, CEO, and chairman of Keefe Bruyette & Woods (KWB), an investment bank headquartered in New York City, had an extramarital affair with Kathryn Gannon, an adult film star and alleged prostitute. 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 and passing the stock tips on to him. McDermott, Gannon, and Pomponio were each indicted for conspiracy to commit insider trading. McDermott and Pomponio were tried together. McDermott was found guilty of conspiracy to commit insider trading in violation of 18 U.S.C. § 371, despite a case built almost entirely on circumstantial evidence linking telephone conversations between McDermott and Gannon with the trading activity of Gannon and Pomponio. McDermott appealed.
Rule of Law
Holding and Reasoning (Oakes, Senior C.J.)
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