Posted by Dan Lytle.
David Ganek, the former owner of a hedge fund in Greenwich, Connecticut, had lost his business in 2013, three months after an FBI investigation took place for alleged insider trading. Two years later, in 2015, Ganek attempted to sue the FBI for $400 million, citing “lost income and lost business reputation.” The reason Ganek went through with the lawsuit is because he did not believe it was fair to investigate his office when he was not involved with insider trading. However, the Second Circuit panel disagreed, saying, “there was at least a fair probability to think that his office was a place where evidence of an insider trading scheme would be found.” While some evidence was found to hold against Ganek, he was not ultimately charged for anything. Ganek still does not believe this was right to do, since it cost him his business. He said of the situation, “’this is a dangerous day for private citizens and a great day for ambitious, attention-seeking prosecutors who are now being rewarded with total immunity even when they lie and leak.’” Just recently, it was announced that Ganek had lost this case against the FBI.
In my opinion, the FBI was acting both legally and morally in searching the office of David Ganek for insider trading evidence. From a legal perspective, the FBI searched the office because they had reason to believe there was evidence present in order to uncover a larger insider trading scheme. Furthermore, morally, the FBI acted correctly, as their search aimed to crack down on insider trading. While I do believe that it is not right that FBI agents can be rewarded with immunity when investigating businesses, this is an exception, as the investigation of this “hedge fun and others sent shockwaves through Wall Street’ and led to the indictment of investment bankers and traders.” Therefore, while Ganek was not necessarily guilty of insider trading, the FBI was able to use information found throughout the raid of his hedge fund that led to the arrests of others, which is a crucial factor as to why Ganek lost this lawsuit.
Speaking legally, the FBI was protected under Amendment IV of the Constitution, which protects citizens against unreasonable searches and seizures. However, in this case, the FBI had probable cause to search Ganek’s hedge fund, as they believed that Ganek’s hedge fund was involved with an insider trading scheme. While the Fourth Amendment states that nobody can be unreasonably searched, it also mentions that “upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, persons or things [can] be seized.” In short, while Ganek did not agree with the ruling because he believed the FBI was granted “immunity” for searching his office and causing his hedge fund to fall apart, the reality is that the FBI acted legally according to Amendment IV.
Dan is a marketing major at the Stillman School of Business, Seton Hall University, Class of 2020.
Sources:
http://news.findlaw.com/apnews/53ca32d894c44c5ea64185ab462b6e72
https://www.billofrightsinstitute.org/founding-documents/bill-of-rights/
The Second Circuit upheld Tom Brady’s suspension for the first four games of the new season and overturned the district court’s ruling. The court ruled the arbitrator’s award was valid and should not be disturbed.
Judge Parker, writing for the majority, stated, “Our role is not to determine for ourselves whether Brady participated in a scheme to deflate footballs or whether the suspension imposed by the Commissioner should have been for three games or five games or none at all. Nor is it our role to second-guess the arbitrator’s procedural rulings.” He continued, “Our obligation is limited to determining whether the arbitration proceedings and award met the minimum legal standards established by the Labor Management Relations Act.”
Courts are loathe to upend an arbitrator’s decision, unless for example, there was some type of fraud or corruption on the part of the arbitrator. The parties agree by contract to arbitration in lieu of bringing their case to court.
Brady can appeal to the entire Second Circuit (en banc) and to the United States Supreme Court, however, his chances either take the case are slim.
The opinion can be found here: http://www.ca2.uscourts.gov/decisions/isysquery/98c62698-d29a-4b91-98a0-5a5af0c19e88/1/doc/15-2801_complete_opn.pdf
According to the latest ruling by Second Circuit, the NSA’s collection of massive amounts of phone records violated the US Patriot Act. Although they never reached the constitutional question, the court said that Congress never gave the agency the authority. But Senate Intelligence Committee Chairman Richard Burr, a North Carolina Republican, believes the court had it wrong, and that Section 215, the provision in question, authorizes the NSA to conduct mass collections. The Act is set to expire in a few weeks. Congress will either renew the Act, change it, or eliminate it altogether.
Under Section 215, certain investigators
may make an application for an order requiring the production of any tangible things (including books, records, papers, documents, and other items) for an investigation to protect against international terrorism or clandestine intelligence activities, provided that such investigation of a United States person is not conducted solely upon the basis of activities protected by the first amendment to the Constitution.
The controversy is over the words “any intangible things,” and in other parts of the Act, the words “information likely to be obtained by such installation and use is relevant to an ongoing criminal investigation.” The court agreeing with privacy advocates that the “relevant to an ongoing criminal investigation” language is too broad. Members of Congress, however, believe that the language is necessary to prevent future terrorist attacks. In any event, any phone record seizure must be preceded by a warrant.
The House is set to vote on the USA Freedom Act. The Freedom Act extends the Patriot Act but removes the power of the NSA to collect bulk phone records.
