U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19544 / January 26, 2006
Securities and Exchange Commission v. James J. McDermott, et al., Civil Action No. 99 Civ. 12256 (MBM) (S.D.N.Y.) (filed December 21, 1999)
Court Enters Final Judgment Against Anthony P. Pomponio
On January 11, 2006, the U.S. District Court for the Southern District of New York entered a final judgment against Anthony P. Pomponio ("Pomponio"), the former Chief Executive Officer of Pomponio Industries, an industrial wheel manufacturing company, based upon charges of insider trading alleged in the Commission's complaint filed on December 21, 1999. The Court found that Kathryn B. Gannon (a.k.a. "Marilyn Starr") disclosed information to Pomponio, which Gannon knew had been misappropriated from Keefe, Bruyette & Woods, Inc., ("Keefe Bruyette") by James J. McDermott ("McDermott"), while McDermott was Chairman and Chief Executive Officer of Keefe Bruyette. The Court also found that Pomponio was aware that this information had been misappropriated by McDermott from Keefe Bruyette and its clients. The court further found that Pomponio, while in possession of this confidential, material and non-public information, purchased and sold securities of companies that were the targets of potential merger or acquisition transactions. The court concluded that Pomponio violated Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 promulgated thereunder with respect to his trading in the securities of Barnett Banks, Inc., First Commerce Corporation, and First Commercial Corporation.
The final judgment permanently enjoined Pomponio from violating the antifraud provisions contained within Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder. The Court also ordered Pomponio to pay $95,306.88, comprising full disgorgement of Pomponio's profits of $35,048 and $25,210.88 in prejudgment interest, and a one-time civil penalty of $35,048.
On December 14, 2000, Pomponio was convicted on one count of criminal conspiracy, three counts of securities fraud, and one count of perjury in a parallel criminal case relating to these same acts of insider trading. He was sentenced to 21 months of incarceration, followed by two years of supervised release, and ordered to pay a criminal monetary penalty of $5000.
McDermott and Gannon previously consented to a final judgment which was entered on May 23, 2005, without admitting or denying the allegations of insider trading in the Commission's complaint. See also Litigation Releases No. 19250 (June 7, 2005) and No. 16395 (December 21, 1999).