Insider-Trading Suspect Arrested in Canada

A pornographic film actress wanted by U.S. authorities in connection with a Wall Street insider-trading case was arrested in Vancouver, Canada, and later freed on bail after a preliminary hearing. Kathryn Gannon, a Canadian known in the adult film industry as Marylin Star, was indicted in the U.S. along with New Jersey businessman Anthony Pomponio and former New York investment banker James McDermott Jr. Gannon is charged with six counts of insider trading and one count of conspiracy. McDermott was convicted last month of conspiracy and fraud in the case. U.S. prosecutors said he passed sensitive information about six potential or pending mergers to Gannon, who was his mistress from June 1997 to February 1998. McDermott, who was head of the investment banking firm Keefe, Bruyette & Woods Inc., also paid Gannon more than $150,000, prosecutors said, citing evidence presented at his trial. A British Columbia judge ordered Gannon freed on $35,000 bail and imposed a gag order on the proceedings without specifying what information was not to be made public or why it was to be kept secret.