Background - David Ganek, cofounder and principal of Level Global (LG), sued FBI agents and SDNY prosecutors under Bivens for Fourth and Fifth Amendment violations arising from a November 22, 2010 search of LG’s Manhattan offices. - A cooperating witness, Sam Adondakis, told investigators he provided nonpublic information to several LG employees; investigators later recorded that Adondakis had told them he informed Ganek of the sources, but Adondakis repeatedly denied ever telling Ganek the sources. - FBI Agent Trask’s affidavit in support of the LG search warrant included the alleged misstatement that Adondakis had informed Ganek of the sources; the magistrate issued the warrant and the search was executed, with some publicity. - Ganek’s fund lost investors and closed months later; Ganek was never indicted. He sued alleging the warrant affidavit contained deliberate/reckless falsehoods and that the search and resulting seizures violated his Fourth and Fifth Amendment rights. - The district court denied qualified immunity in part, allowing claims to proceed; defendants appealed. The Second Circuit reversed, holding defendants entitled to qualified immunity and directing dismissal of all claims. ### Issues | Issue | Plaintiff's Argument | Defendant's Argument | Held | |---|---:|---:|---| | Whether the affidavit’s alleged false statement (that Adondakis told Ganek the sources) was necessary to probable cause for the search | Ganek: the misstatement was material and necessary to establish probable cause to search his office | Defendants: even removing the statement (and adding that Adondakis denied telling Ganek), the corrected affidavit still established probable cause to search Ganek’s office | Held: Corrected affidavit still established probable cause; no Fourth Amendment violation from the misstatement; qualified immunity applies | | Whether the warrant was overbroad in scope | Ganek: warrant authorized an expansive, rummaging search of personal files and devices not justified if he was not a knowing participant | Defendants: Attachment A/B limited the search to business records and communications likely to contain evidence of insider trading | Held: Scope was justified by probable cause and the warrant’s stated limits; no overbreadth violation | | Whether fabrication in the affidavit supports a Fifth Amendment procedural due process claim for loss of property/business | Ganek: fabricated evidence caused unlawful deprivation of property (seizures and business loss) | Defendants: corrected affidavit would still have authorized the search and seizures; any deprivation therefore not caused by fabrication | Held: Because corrected affidavit supports the search, Ganek cannot show deprivation resulted from fabrication; due process claim fails | | Liability for failure to intercede / supervisory liability | Ganek: agents and supervisors failed to correct the affidavit or to mitigate reputational/economic harm; supervisors were involved at high levels | Defendants: no constitutional duty to publicly clarify investigative status; supervisors not shown to have known of or participated in any false statement | Held: No plausible failure-to-intercede claim; no established right to post-search clarification; supervisory liability not pleaded with personal involvement; claims dismissed | ### Key Cases Cited Bivens v. Six Unknown Named Agents, 403 U.S. 388 (establishing implied damages remedy against federal officers) Harlow v. Fitzgerald, 457 U.S. 800 (qualified immunity standard) Ashcroft v. al-Kidd, 563 U.S. 731 (clearly established prong and standards for qualified immunity) Illinois v. Gates, 462 U.S. 213 (probable cause totality-of-the-circumstances test) Zurcher v. Stanford Daily, 436 U.S. 547 (probable cause to search premises need not require probable cause to arrest the occupant) Messerschmidt v. Millender, 565 U.S. 535 (qualified immunity protects reasonable but mistaken judgments) Walczyk v. Rio, 496 F.3d 139 (2d Cir.) (probable-cause and search-warrant challenges) United States v. Newman, 773 F.3d 438 (2d Cir.) (evidence about knowing receipt/use of inside information)