David Ganek is suing the government for a “surreal” raid that ultimately destroyed his hedge fund, according to Business Insider.
Last December, the United States Court of Appeal, second circuit, tossed out convictions for David Ganek and Anthony Chiasson for insider trading (both men were also formerly employed by Steve Cohen’s SAC Capital, which was shuttered because of unlawful trading which did not involve Ganek and Chiasso).
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While the men felt “vindicated” by the verdict, Ganek is now suing for the government for raiding his hedge fund, Level Global, based only on a fabrication, for violating his rights during the raid, causing the dismissal of 65 employees and wrecking his reputation.
David Ganek described the 2010 raid “surreal” as the FBI stormed in with members of the press on hand. No arrests were made during the raid, but as a result, 65 of Level Global employees were dismissed, and some have had difficulty finding work since. Ganek and Chiasson were arrested in 2012, were convicted in 2013 and paid the SEC $20.5 million to settle the insider trading charges before the convictions were overturned.
The decision to raid the hedge fund was based on a fabricated claim made by a government informant. In the course of the trial, the claim was found to have included a material error. While hawkish U.S. Attorney Preet Bharara justified the raid on CNBC, comparing it to firefighters forcing their way into a building and later finding out there was only smoke and no fire, Ganek says he and his partners 4th and 5th amendment rights to due process and freedom from unwarranted searches, were violated,
