Hedge fund manager Daniel Kamensky faces fraud charges related to Neiman Marcus bankruptcy

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Hedge fund manager Daniel Kamensky is facing civil and criminal charges in connection with his role as co-chair of the unsecured creditors committee (UCC) in the Neiman Marcus Chapter 11 bankruptcy proceedings.

On Thursday, the Securities and Exchange Commission (SEC) and the U.S. Attorney’s Office for the Southern District of New York filed parallel lawsuits against Kamensky.

Daniel Kamensky allegedly abused his position

The SEC and Attorney’s Office for the Southern District of New York charged Kamensky with securities fraud, wire fraud, extortion, and obstruction of justice.

Prosecutors alleged that he used his position on the bankruptcy committee to pressure a rival bidder to abandon its higher bid for Neiman Marcus’ securities in the bankruptcy proceeding so that his hedge fund, Marble Ridge Capital could acquire those assets for a lower price.

Kamensky allegedly abused his position on July 31 after learning that Jefferies Financial Group submitted a bid for Neiman Marcus’ Series B shares at a price between $0.30 and $0.40 each. He allegedly contacted the investment bank and threatened to use his position in the UCC to block its bid. He also warned Jefferies that if it will step away, Marble Ridge will stop doing business with the investment bank.