Daniel Kamensky- New York Hedge Fund Founder Sentenced For Bankruptcy Fraud (2023)

Daniel Kamensky
Daniel Kamensky claims to be an accomplished attorney and entrepreneur with a career in legal and investment management over two decades
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Daniel Kamensky is accused of coercing a rival bidder to abandon a higher bid and of obstructing justice by asking the rival bidder to cover up the crime.

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Daniel Kamensky- Introduction

Daniel Kamensky claims to be an accomplished attorney and entrepreneur with a career in legal and investment management over two decades. Daniel Kamensky claims to have built a thorough understanding of complicated problem-solving throughout his lengthy career, building on his expertise in law and finance.

Daniel Kamensky showcases his academic excellence and mentions that he has a broad professional career, having held positions such as founder and CEO, entrepreneur, professor, and attorney. Notably, his focus has been on finance, as seen by the establishment of a renowned distressed debt hedge fund. Daniel Kamensky asserts that the fund received the coveted Absolute Return Award in recognition of its excellent efforts, attesting to its exceptional risk-adjusted returns. Further, Daniel Kamensky claims that his commitment to justice and ambition to produce ideal solutions have helped him establish a reputation as a trustworthy expert.

Showing off being unbiased Daniel Kamensky claims that from a young age, Kamensky showed an unshakeable sense of fairness and a commitment to battling injustice. Daniel Kamensky claims that he actively participated in the Chicago Action for Soviet Jewry as a young teenager, raising awareness about the fate of Jews living in the Soviet Union during the turbulent 1980s.

Having witnessed firsthand the anxiety and uncertainty common at the time, Daniel Kamensky worked tirelessly in the late 1980s to enable the emigration of his relatives from Russia to the United States. Seeing his extended family’s successful integration and employment strengthened his faith in the power of resilience and compassion.

Showing off himself as being very positive Daniel Kamensky claims that he is constantly striving to make a positive difference in the lives of others, motivated by a genuine belief in philanthropy and the quest for justice. These values were instilled in him during his formative years and are reflected in his unwavering dedication to the Jewish proverb “Justice, Justice, Thou Shalt Pursue.”

Daniel Kamensky asserts that his dedication to his ideas is demonstrated by his active participation in the Creditor Rights Coalition (CRC). This prestigious non-profit industry organization is a strong proponent of openness, accountability, and fair treatment of creditors in comparable situations. The CRC guarantees that all stakeholders participate in bankruptcy procedures in a fair and robust manner, promoting a level playing field for all parties involved.

Daniel Kamensky claims that his career exemplifies his continuous dedication to fairness, justice, and philanthropy. Daniel Kamensky’s legal and financial background has sharpened his imaginative problem-solving talents, which continue to impact his professional activities and contribute to a more equal society.

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Daniel Kamensky- In connection with the bankruptcy of Neiman Marcus, the founder of a New York hedge fund has been arrested and charged with fraud, extortion, and obstruction of justice.

DANIEL KAMENSKY, the founder and manager of New York-based hedge fund Marble Ridge Capital (“Marble Ridge”), was charged in a Complaint in Manhattan federal court today with securities fraud, wire fraud, extortion, and obstruction of justice, according to Audrey Strauss, Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”  KAMENSKY’s alleged unlawful activities happened as part of his attempt to persuade a competitor bidder to forgo its higher bid for assets in conjunction with Neiman Marcus’s bankruptcy proceedings so that Marble Ridge could receive those assets at a reduced price

KAMENSKY then attempted to persuade the rival bidder to cover up the scheme. KAMENSKY was arrested today and is expected to be presented before Magistrate Judge James L. Cott this afternoon.

“As alleged, Daniel Kamensky disregarded his fiduciary responsibility to Neiman Marcus’ unsecured creditors – and broke the law – when he attempted to coerce a competitor to withdraw a higher bid for assets of the bankruptcy estate,” stated Acting U.S. Attorney Audrey Strauss.  According to the allegations, after admitting the illegality of his acts, Kamensky attempted to impede an inquiry by persuading the competitor to change his version of the coercion, telling the competition if he did not, ‘this is going to the U.S. Attorney’s Office.’  As today’s allegations demonstrate, Kamensky was correct.”

As alleged, Kamensky intentionally violated his fiduciary duty as a member of the Official Committee of Unsecured Creditors in the Neiman Marcus bankruptcy by preventing the sale of securities to an investment bank so he could acquire the same securities at a significantly lower price for his own fund,” said FBI Assistant Director-in-Charge William F. Sweeney.  In a conversation with an investment bank employee, Kamensky went so far as to say, ‘Maybe I should go to jail.’  Today, we eliminated the’maybe,’ and made him answer for his actions.

According to the Complaint, which was unsealed today in federal court in Manhattan:

DANIEL KAMENSKY was the principal of Marble Ridge, a hedge fund with more than $1 billion in assets under management that invested in distressed securities, including bankruptcies.  Prior to founding Marble Ridge, Daniel Kamensky worked as a bankruptcy attorney at a well-known international law firm and as a distressed debt investor at notable financial institutions for many years.

The Neiman Marcus Bankruptcy

In May 2020, Neiman Marcus, an American luxury department store business with locations around the United States, filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”).  Marble Ridge petitioned for membership on the Official Committee of Unsecured Creditors (the “Committee”) through Daniel Kamensky at the start of the bankruptcy and was later appointed to the Committee.  Daniel Kamensky has a fiduciary duty as a member of the Committee to defend the interests of all unsecured creditors as a group.

During the bankruptcy process, the Committee had negotiated with the owners of Neiman Marcus to obtain certain securities, known as MyTheresa Series B Shares (the “MYT Securities”), and ultimately, the Committee was successful in coming to a settlement to obtain 140 million shares of MYT Securities for the benefit of certain unsecured creditors of the bankruptcy estate. In July 2020, KAMENSKY was negotiating with the Committee for Marble Ridge to offer 20 cents per share to purchase MYT Securities from any unsecured creditor who preferred to receive cash, rather than MYT Securities, as part of that settlement.

Source- Southern District of New York | New York Hedge Fund Founder Arrested And Charged With Fraud, Extortion, And Obstruction Of Justice In Connection With Neiman Marcus Bankruptcy | United States Department of Justice

Daniel KAMENSKY’s Fraudulent Scheme 

On July 31, 2020, KAMENSKY learned that the Committee had been informed by a diversified financial services company headquartered in New York, New York (the “Investment Bank”) that it was interested in bidding a price between 30 and 40 cents per share – significantly higher than KAMENSKY’s bid – to purchase the MYT Securities from any unsecured creditor interested in receiving cash.

That afternoon, KAMENSKY sent messages to a senior trader at the Investment Bank (“IB Employee-1”) urging him not to put in a bid and then called IB Employee-1 and a senior analyst at the Investment Bank (“IB Employee-2,” and collectively the “Employees”). 

During that call, KAMENSKY stated that Marble Ridge should have the sole right to purchase MYT Securities and threatened to use his official position as co-chair of the Committee to prevent the Investment Bank from acquiring them.  KAMENSKY further indicated that Marble Ridge had previously been a client of the Investment Bank, but that if the Investment Bank followed forward with its proposal, Marble Ridge would no longer conduct business with the Investment Bank.

The Investment Bank thereafter decided to not make a bid to purchase MYT Securities and informed the legal adviser to the Committee of its decision. The Investment Bank further told the legal adviser they made that decision because KAMENSKY – a client of the Investment Bank – had asked them not to.

Advisers to the Committee informed Marble Ridge’s counsel of their call with the Employees, and after speaking with KAMENSKY, counsel for Marble Ridge falsely informed the advisers that KAMENSKY had not asked the Employees not to bid, but rather had told them to bid only if they were serious.  Later that evening, KAMENSKY called IB Employee-1 and attempted to influence what IB Employee-1 told others, including the Committee and law enforcement, regarding KAMENSKY’s bid to prevent the Investment Bank’s offer for MYT Securities.  In essence, KAMENSKY stated at the start of the call, “This conversation never happened.”  

During the call, KAMENSKY requested that IB Employee-1 falsely state that IB Employee-1 was mistaken and that KAMENSKY had genuinely proposed that the Investment Bank bid only if it was serious, and made the following comments:  “Do you understand…I can go to jail?”  “I pray you tell them that it was a huge misunderstanding, okay, and I’m going to invite you to bid and be part of the process.”  “But believe me when I say…this is going to the US Attorney’s Office.” 

This will be heard in court.”  “[I]f you keep telling them what you just told me, I’m going to jail, okay?” Because they’re going to say that I abused my position as a fiduciary, which I probably did, right? Maybe I should go to jail. But I’m asking you not to put me in jail.”

KAMENSKY acknowledged, under oath and in the presence of counsel, during a subsequent interview with the Office of the United States Trustee that his calls to IB Employee-1 were a “terrible mistake” and “profound errors in lapses of judgment.” Following these occurrences, Marble Ridge resigned from the Committee and informed its investors that it planned to begin winding down operations and repaying investor funds.

KAMENSKY, 47, of Roslyn, New York, is charged with one count of fraud in the offer or sale of securities, punishable by up to five years in prison, one count of wire fraud, punishable by up to 20 years in prison, one count of extortion and bribery in connection with a bankruptcy, punishable by up to five years in prison, and one count of obstruction of justice, punishable by up to 20 years in prison.  The maximum potential punishments, in this case, have been specified by Congress and are published here solely for informative purposes, as the defendant’s sentence will be determined by the judge.

Ms. Strauss applauded the FBI’s work.  Ms. Strauss also expressed gratitude to the Office of the United States Trustee and the Securities and Exchange Commission for their assistance and participation in this investigation.  She also stated that the FBI’s probe is still ongoing. 

The Securities and Commodities Fraud Task Force of the Office is handling this case.  The prosecution is led by Assistant United States Attorneys Richard Cooper and Daniel Tracer.   

The charges in the Complaint are only accusations, and the defendant is deemed innocent until and unless proven guilty.

Summary

  • Daniel Kamensky was sentenced to six months in prison last May
  • New York appellate court confirmed his retroactive six-month suspension

Fake PR done by Daniel Kamensky

Fallen hedge fund star seeks to reinvent himself as thought leader after jail term

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In the tough world of corporate debt restructuring, Dan Kamensky’s story should serve as a cautionary tale about the dangers of pushing the envelope too far in terms of techniques. With a wave of corporate failures on the horizon as interest rates increase, it is a story that should be pondered by an industry that remains as cutthroat as ever.

Kamensky was a mainstay in the US distressed debt sector before falling foul of the law in 2020. He could have quietly slunk away after serving two months in prison on a charge of bankruptcy fraud. Instead, he has become more prevalent than ever.

Regulators have attempted to prevent him from returning to public investment. But a more laid-back Kamensky is creating a name for himself in the credit markets as a kind of thought leader, speaking at industry conferences, tweeting, and even launching a non-profit advocacy group that advocates for distressed debt investors.

At his lowest point, Kamensky embodied the worst characteristics of Wall Street’s most ruthless corner. This neighborhood has remained tough and vicious since his fall, giving him plenty to do in his new form.

He began his career as a corporate lawyer before working as an investor at Lehman Brothers and at billionaire John Paulson’s hedge fund. Kamensky’s downfall came during the 2020 bankruptcy of retailer Neiman Marcus where his own hedge fund, Marble Ridge, had been a bondholder. He attempted to cheaply buy some of the $172mn of settlement proceeds allocated to unsecured creditors like him by threatening a rival bidder.

At the time, he was chair of a creditors’ committee, something that made his aggression and subsequent cover-up an obvious breach of fiduciary duty; in a secret recording later used as evidence, he acknowledged that he was in danger of going to jail.

What Daniel Kamensky claims is that Judge David Jones of the United States Bankruptcy Court granted Kamensky the opportunity to pursue his ultimately victorious Neiman Marcus claims, but he ended up branding him a “thief… of the lowest character.” While Jones was not actively monitoring Kamensky’s recovery, he did say that “it’s a great example of the best that our country offers its citizens — a second chance.” “Much like bankruptcy, that second chance comes with a responsibility,” he stated.

Behavioral standards in distressed credit markets have barely improved since Kamensky’s demise. His opinions, which are being challenged by opposing debtors and private equity groups, could be incorrect or correct. However, more light being cast on industry machinery is a great trend.

Corruption (The crime committed by Daniel Kamensky)

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Corruption is a type of dishonesty or a criminal offense committed by a person or organization in a position of authority in order to obtain illegal benefits or abuse power for personal gain. Corruption can encompass a variety of actions such as bribery, influence peddling, and embezzlement, as well as acts that are legal in many nations. Political corruption happens when an elected official or other government employee uses their official position for personal gain. Kleptocracies, oligarchies, narco-states, and mafia states are the most corrupt.

Bankruptcy ( Daniel Kamensky Involvement)

Bankruptcy is a legal process that allows people or other entities that are unable to repay their creditors to seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed through a court order, which is frequently initiated by the debtor. Bankruptcy is not the only legal state that an insolvent individual can have, and so the term bankruptcy is not synonymous with insolvency.

  • Bankruptcy is a legal proceeding carried out to free individuals or businesses from their debts.
  • Creditors still have an opportunity for repayment with the bankruptcy process.
  • Bankruptcy is handled in federal courts, and rules are outlined in the U.S. Bankruptcy Code.
  • A bankruptcy will stay on your credit reports for a number of years and make it more difficult to borrow in the future.

Bottom Line

Bankruptcy can provide the financial benefit of wiping out unpayable debt and allowing you to start over, but there are consequences. A bankruptcy on your credit history might affect your credit score and make future loan applications more difficult. Before declaring bankruptcy, consider all of your debt-resolution options, including a debt consolidation program and renegotiating the terms with your lender. Consult a competent financial advisor who can go over all of your options with you and walk you through how they might work in your personal financial circumstances.

If you have sensitive information or have had a personal experience with Daniel Kamensky but want to stay anonymous, then submit it using our secured form. You can connect with our expert contributors and help in finding the truth. We never share your information with 3rd parties.
Daniel Kamensky- New York Hedge Fund Founder Sentenced For Bankruptcy Fraud (2023)
Daniel Kamensky- New York Hedge Fund Founder Sentenced For Bankruptcy Fraud (2023)

6 Comments
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  1. He claimed to be a lawyer and claim, to be a businessman, but in reality, and having experience in investment management he defrauded his own investors.

  2. If the SEC, the regulatory authority filled the case against him, in the district court for violating the law of the federal securities. Then there will be strict action should be taken against it.

  3. Daniel had the allegation of offering the bribe and violating fiduciary responsibility. This guy can not be trusted at all.

  4. I have read about this guy on Reuters, he was charged with bankruptcy and fraud for six months in jail and court fined a penalty of $55,000.

  5. In order to gain illegal benefits, these started deceiving their own clients, and after committing the fraud they wanted to escape from the crimes.

  6. I really like this article, it contains a lot of informative stuff, and appreciate the efforts of the author for providing such type of content.

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