The fallout from Manhattan US Attorney Preet Bharara’s massive insider trading crackdown isn’t over.
The feds asked a Manhattan federal judge on Friday to throw out a lawsuit leveled against them by ex-hedge fund manager David Ganek, co-founder of Level Global, which collapsed after the government raided it in 2010.
Ganek was named seven times in the search warrant leading to the raid. While his former partner, Anthony Chiasson, was convicted of insider trading and later exonerated, Ganek was never indicted.
In his suit against Bharara, FBI agents and other prosecutors, Ganek claimed the government “fabricated” evidence against him and that the search warrant was unconstitutional.
The government contends Ganek “had sufficient knowledge to be considered an unindicted co-conspirator,” making the search lawful.
In the hearing Friday, Judge William Pauley asked Assistant US attorney Andrew Krause if prosecutors considered the former hedge fund manager “collateral damage” in its pursuit of Wall Street scofflaws.