The hedge fund executive has been sentenced to 6 months in prison for bankruptcy fraud
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A New York federal judge has sentenced a prominent U.S. hedge fund manager to six months in prison for misconduct in the 2020 failure of luxury retailer Neiman Marcus.
Dan Kamensky, founder of Marble Ridge Capital, he pleaded guilty in February, a single $ 172 million allotted to Neiman’s unscrupulous creditors was improperly linked to an effort to secure a fraudulent charge.
Kamensky appeared in a socially distressed court appearance on Friday for the punishment he wore in a dark suit, accompanied by lawyer Joon Kim and a small group including his wife and son-in-law.
The Federal Bureau of Investigation in September shook Kamensky’s arrests at a suburban New York home early in the morning through unfortunate and corporate law communities. The New York prosecutor initially charged Kamensky with four crimes, including fraud, extortion and obstruction of justice.
Former Georgetown-trained corporate lawyer, Neiman’s fiancé, took a long time but eventually achieved great success in resolving claims that Neiman’s private property owners had misappropriated a valuable asset in the online store MyTheresa, out of the reach of creditors in 2019 before Neiman he failed.
In July, private capital owners Neiman, Ares Management and the Investment Board of Canada’s Pension Plans agreed to grant preferred shares in MyTheresa to resolve claims that the transfer was fraudulent.
Kamensky, who chaired an official creditors ’committee, offered to buy some of those liquid shares for 20 cents a dollar from claimants who wanted immediate money.
He admitted that he was outraged when the investment bank Jefferies tried to buy these claims at a higher price, and explained that for several years he had directed the fight against private equity firms.
“Nothing can change what happened that day or forgive the things I said,” Kamensky told Judge Denise Cote on Friday. “I made serious and horrible mistakes.”
An investigation by the U.S. board of trustees, affiliated with the Justice Department, revealed that Kamensky told Jefferies to stay away by sending a Bloomberg chat message telling the company banker “NO ASK” and threatening to stop doing business with the bank later. .
In a subsequent interview recorded by a Jefferies executive, Kamensky realized he had breached his fiduciary duties to his creditors and asked the bank to prevent him from being implicated: “I urge you not to go to jail.”
“He tried to rewrite history,” Cote said Friday. “He tried to get another person to lie. He tried to interfere with justice. “
In the face of evidence of his pressure campaign, Kamensky admitted his misrepresentation. Eventually Marble Ridge closed and an agreement was reached in judicial bankruptcy apart from the criminal charges.
Kamensky’s lawyers argued that he should be saved in prison, writing in court records that his misconduct “occurred almost immediately and did not involve any premeditation or planning,” and that “he should not have reacted in times of stress and pressure.”
In his view, unsecured creditors were left unharmed when Jefferies finally bid for MyTheresa titles. Kamensky sent more than 100 people from letters of support from relatives, friends and business associates, and said his health would be in jeopardy by an appearance at Covid prison.
In recent months he has worked in law and business schools on the ethical lessons of probation in the Neiman case.
The federal prosecutor argued that the sentence guidelines required a sentence of 12-18 months in prison. They wrote that “in this case the prison sentence will send a message to those involved in the bankruptcy process that they must comply with the rules and ensure the correctness of the procedure to all actors.”
Cote said a shorter prison term was enough, with a six-month prison sentence, a six-month house arrest and a $ 50,000 fine imposed.
US Board of Trustees added to another file “[t]The damage caused by Kamensky’s abuse of the bankruptcy system cannot be excessive. “
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