Risk & Compliance

Hedge Fund Founder Accused of Neiman Fraud

U.S. authorities say Daniel Kamensky coerced a rival bidder to drop a higher offer for the e-commerce business of the bankrupt retailer.
Matthew HellerSeptember 4, 2020
Hedge Fund Founder Accused of Neiman Fraud

The founder of distressed debt hedge fund Marble Ridge Capital has been charged with defrauding creditors of Neiman Marcus by coercing a rival bidder to drop a higher offer for the thriving e-commerce business of the bankrupt retailer.

Daniel Kamensky, 47, was arrested Thursday on criminal charges alleging he abused his position on the Neiman unofficial creditors’ committee (UCC) after he learned in July that the Jefferies investment bank was willing to bid as much as twice as much for shares in the MyTheresa online unit as Marble Ridge.

The U.S. Department of Justice also charged Kamensky with extortion and obstruction of justice for allegedly attempting to enlist Jefferies in a cover-up of his misconduct. “Do you understand … I could go to jail?” he told an employee of the bank during a phone call that was taped by investigators.

In a related civil action, the Securities and Exchange Commission has accused Kamensky of violating an anti-fraud provision of the federal securities laws.

“Kamensky intentionally violated his fiduciary duty as a member of the [creditors’ committee] 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,” FBI Assistant Director-in-Charge William F. Sweeney said in a news release.

Neiman filed for Chapter 11 bankruptcy in May, with Kamensky being appointed co-chair of the UCC. On July 28, he outlined a proposal to the committee to purchase 60 million MyTheresa shares at 20 cents per share from other creditors wishing to sell their stock.

Three days later, however, Jefferies unveiled a bid at a price between 30 cents and 40 cents per share.

According to the government, Kamensky pressured Jefferies into withdrawing by telling the bank he would use his position on the committee to ensure its bid was rejected and if it moved forward with the offer, Marble Ridge would cease doing business with Jefferies.

“Within an hour of learning of a competing bid for the MyTheresa shares, Kamensky had undermined and manipulated the offering of those securities,” the SEC alleged.

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