Porn Star Gets Prison for Insider Stock Scheme

NEW YORK (Reuters) - The porn-star mistress of a former investment bank chairman was sentenced on Wednesday to three months in prison for trading on inside stock tips he gave her and sharing the information with another lover.

Calling herself a "tough chick" and an "adventuresome Aries" Kathryn Gannon, 33, told reporters that while she was surprised she got prison time, the sentence would only help promote a movie being made about her life.

Gannon, who is known in the adult film industry as Marylin Starr, had pleaded guilty in June to two conspiracy counts relating to the illegal use of inside information she got from James McDermott Jr., former head of Keefe, Bruyette & Woods.

Gannon remains free on a $300,000 personal recognizance bond secured by $5,000 in cash, which had been posted previously. Gannon, who has given up her passport, cannot travel outside New York State and must surrender to federal authorities in Manhattan on Dec. 2. No decision has been made yet as to where she will serve her term.

After the hearing, Gannon said she had spent $500,000 on her legal defense and is now completely broke.

Gannon was charged with McDermott in the high-profile 1999 insider trading case along with Anthony Pomponio, another lover with whom she shared the tips. Gannon fled to Vancouver before she could be arrested in the United States for her role in the scheme that lasted between May 1997 and the summer of 1998.

Gannon admitted during her plea hearing that she had received the inside information from McDermott with whom she had a "romantic relationship." She said that McDermott had told her to keep the information secret but that she had shared it with Pomponio. Prosecutors said Pomponio earned $86,000 from his trades.

Gannon told reporters that she got into trouble because she had been a naive young woman who dated an older man.

"Older men like younger women because they are too dumb to stand up for their rights. Instead of saying no, they say yes, Daddy, yes Daddy."

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