Ex-Wall Street Executive Sentenced
N E W Y O R K, Aug. 3 -- A former top Wall Street executive who gaveinside information on bank stocks to an X-rated movie actress wassentenced today to eight months in prison.
James McDermott Jr., 49, turned toward more than 50 spectatorsat his sentencing and apologized to his wife and two daughters.
“Where I see weakness and cowardice, they saw strength andcourage,” he said in a firm voice, which had become a fixture onTV financial programs when he was chief executive of the New Yorkinvestment bank Keefe, Bruyette & Woods.
McDermott lost his job after he gave inside information toKathryn Gannon, a Canadian woman known as “Marylin Star” in theX-rated movie industry.
Gannon, 31, allegedly shared some information with AnthonyPomponio, 45, of North Caldwell, N.J., who was convicted of insidertrading after acknowledging his own affair with Gannon. Gannon andPomponio allegedly made $170,000 in illegal profits.
U.S. District Judge Kimba Wood, commenting that insider trading“undermines investor confidence in the securities markets,” alsofined McDermott $25,000 and ordered him to perform 300 hours ofcommunity service.
‘A Master of the Universe’
The sentence was less than half of what federal sentencingguidelines recommended for his April conviction for conspiracy andsecurities fraud.
The judge said she could sentence McDermott to a shorter prisonterm because he was needed at his home in Briarcliff Manor, N.Y.,to care for a daughter who had extraordinary needs. She did notelaborate.
McDermott disputed prosecutors’ portrayal of him as an arrogantWall Street big shot who broke the law despite a $4 million-a-yearjob.
“I was called a stud stock picker, a master of the universe,”McDermott said. “Those things couldn’t be further from the truth.I’m just an average person who tried to work hard and give back.”
Gannon was arrested in May in Vancouver, British Columbia, andis free on $50,000 bail. Extradition proceedings are under way tobring her to the United States.
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