A federal judge dealt a blow to Manhattan U.S. Attorney Preet Bharara, saying that he found it plausible that prosecutors and FBI agents violated the constitutional rights of hedge-fund founder David Ganek when they raided his offices in 2010, the Wall Street Journal reported today. The ruling yesterday advances a lawsuit brought by Ganek against Bharara and current and former prosecutors and Federal Bureau of Investigation agents involved in an insider-trading investigation of the hedge fund, Level Global Investors. It also means the defendants in the suit, Bharara and the prosecutors and agents, will have to turn over documents related to obtaining a search warrant of Level Global’s offices. In his suit, Ganek asserts that evidence was fabricated to obtain the warrant. Ganek sued in February alleging the government obtained a search warrant based on misrepresentations that implicated him in an insider-trading scheme. FBI agents raided Level Global’s offices a day after obtaining the warrant. Within months, the fund was closed.
