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A 2010 raid of now-defunct hedge fund Level Global was "based completely on a lie," an attorney for the fund's manager David Ganek argued on Friday.
Ganek on Thursday sued prosecutor Preet Bharara and U.S. officials, claiming they fabricated accusations against him that prompted the search.
"As a result of being named in the warrant, as a result of how public it was, he was forced to close down his business," Ganek's lawyer Nick Brustin told CNBC's "Closing Bell. "
Ganek was never charged in the case. He now alleges that the insider trading investigation was based on a lie.
Brustin contended on Friday that the hedge fund closed as a result of the investigation, causing about 60 people to lose their jobs.
Bharara, the U.S. attorney for the Southern District of New York, has earned a reputation as a tough Wall Street prosecutor since he took the position in 2009. His office declined to comment on the lawsuit.
Brustin claimed that the investigation of Level Global was "not careful in the least." He noted that the insider trading conviction of Ganek's partner was overturned in a federal appeals court.