SEC Obtains Judgment Against Fund Manager and Bars Him from Appearing or Practicing Before the SEC

Litigation Release No. 25212 / September 21, 2021

Securities and Exchange Commission v. Daniel B. Kamensky, 1:20-cv-07193 (VEC) (S.D.N.Y. filed September 3, 2020)

The Securities and Exchange Commission announced that on September 10, 2021, the Honorable Valerie E. Caproni of the United States District Court for the Southern District of New York entered a final judgment against defendant Daniel B. Kamensky, whom the SEC previously charged with abusing his position as co-chair of the unsecured creditors committee in the Neiman Marcus Group Ltd. LLC Chapter 11 bankruptcy proceedings. The judgment imposes on Kamensky a permanent injunction against future violations of certain antifraud provisions of the federal securities laws. The SEC also immediately barred Kamensky from appearing or practicing before the Commission.

The SEC's complaint, filed on September 3, 2020, alleged that, as co-chair of the unsecured creditors committee, Kamensky acted as a fiduciary to all unsecured creditors. The SEC's complaint further alleged that Kamensky sought to take advantage of his role on the committee to manipulate a bidding process to benefit the portfolio he managed, and at the expense of the unsecured creditors. According to the complaint, in his role as fund manager, Kamensky sought to purchase securities being distributed as part of the Neiman Marcus bankruptcy proceedings and coerced a competing bidder into withdrawing its bid, which was higher than Kamensky's own bid and would have led to a larger distribution to the unsecured creditors. When his actions came to light, Kamensky allegedly attempted to cover-up his misconduct by trying to persuade the other bidder not to describe Kamensky's conduct as a threat.

On February 3, 2021, Kamensky pleaded guilty to criminal conduct related to certain matters charged in the SEC's complaint. Kamensky was sentenced to six months imprisonment, six months supervised release, and ordered to pay a $55,000 criminal fine.

In the SEC's matter, Kamensky consented to the entry of a judgment permanently enjoining him from further violating the anti-fraud provisions of Section 17(a) of the Securities Act of 1933. Separately, the SEC instituted proceedings against Kamensky forthwith barring him from appearing or practicing before the SEC under Commission Rule of Practice 102(e). In addition, the SEC has also instituted proceedings against Kamensky to determine what other remedial sanctions may be appropriate.

The SEC staff responsible for the investigation and the ongoing litigation includes Joseph P. Ceglio and Dan Nigro from the Complex Financial Instruments Unit, and Alex M. Vasilescu and Richard Hong from the New York Regional Office, with assistance from Alistaire Bambach and Ling Yu also of the New York Regional Office. The investigation was supervised by Osman E. Nawaz.

For further information, see Press Release 2020-203 (Sept. 3, 2020).