A New York hedge fund founder was sentenced to six months in jail on Friday for corrupting the sale of some assets during the Neiman Marcus bankruptcy.
The ruling came after Daniel Kamensky of Roslyn, New York, pleaded guilty to committing bankruptcy fraud in February this year. Kamensky had pressured Jefferies Financial Group to not bid for securities belonging to Neiman Marcus so his hedge fund Marble Ridge Capital LP, could acquire them at a lower rate.
“He betrayed his profession, his duty to others, his relationships,” said U.S. District Judge Denise Cote in Manhattan.
“He broke the law.”
Cote added that she found Kamensky “deeply remorseful” and that he “came undone” from the handling the pressures of running now-closed Marble Ridge.
“There is no excuse for my behavior, and I am deeply regretful and embarrassed for my conduct,” Kamensky said before being sentenced.
According to prosecutors, Kamensky had threatened to refrain from doing business with Jefferies if it pursued its bid. He also asked an employee to lie about what he had done, Reuters reported.
“Do you understand… I can go to jail,” prosecutors quoted Kamensky as saying.
“They’re going to say that I abused my position as a fiduciary, which I probably did, right?”
Prosecutors were seeking to sentence Kamensky 12 to 18 months in prison, while Kamensky had requested probation. Aside from the six-month prison sentence, Kamensky has also been sentenced to six months of home confinement and a fine of $55,000.
According to Reuters, more than 100 people had sent letters supporting leniency.
Last year, Neiman Marcus had filed a temporary restraining order to block Marble Ridge from winding down its operations at least until the fund pays the retailer what it owed in alleged damages, which equates to $55 million.