Admitting, “Maybe I should go to jail” on a recorded line will certainly never work in your favor.
Has Dan Kamensky ever seen Billions? For sure not. Kamensky launched Marble Ridge Capital, his hedge fund aimed at distressed financing in 2015 with $20 million, which is not that much for a guy who looks like half Prince William, half Winklevoss. In only a few years, he grew the firm to a point of managing nearly $1 billion. What Dan did pick up from Billions was an addiction to mental coaching, meditation, and a sleep specialist. This guy was a headcase.
So much of a headcase that he began buying an alarming amount of Neiman Marcus bonds in 2018. We all know how that went. What complicates the story is the fight for a German online site called MyTheresa, which Neiman acquired through its private equity ownership group, Ares Management. Well, Ares said not so fast, we will be taking that site back, leaving bond holders with nothing other than mediocre designer shoes and bags.
Lawsuits were launched, which in the world of distressed debt, are more common than Steve Cohen trading on insider information. Neiman ultimately caved, which gave half of MyTheresa to the company’s creditors. All were on board except for Kamensky, who believed they were still getting boned.
All of a sudden, COVID hits and Neiman is done trying to get you to test perfume and cologne. Marble Ridge’s fund fell 12% on the news. Look at that guy. He looks like someone who’s biggest adversity in life was deciding which target school his parents were going to bribe for his admission. Naturally, he has no quit. He joins the creditor’s committee to represent all creditors in the company’s bankruptcy. Kamensky wanted all the preferred shares of MyTheresa he could get his hands on, so he continued his fight for the right to acquire more of the site (Yes, that was poetic). He would then turn around and offer to buy the shares from other creditors that probably wanted to curbstomp him at this point.
Feeling comfortable, Kamensky was once again blindsided, this time by Jeffries, his longtime broker. They wanted a little taste of MyTheresa as well. This is where Kamensky loses his mind.
WSJ – At 3:20 that summer Friday afternoon, he texted Joe Femenia, his contact at Jefferies, “DO NOT SEND IN A BID.” In a phone call 20 minutes later with Mr. Femenia and Eric Geller, a Jefferies colleague, he yelled and cursed at the men, according to a Justice Department probe. Four hours after he made his threat, Mr. Kamensky called Mr. Femenia again. On the call, he pleaded with Mr. Femenia to tell a different story to authorities—that Mr. Kamensky wanted Jefferies to bid only if it was serious about going through with the deal. “I pray you tell them that this was a huge misunderstanding,” Mr. Kamensky said on the call, which was recorded by Mr. Femenia. He said he could go to jail without Mr. Femenia’s help.
And just like that, you get raided and cuffed at your Long Island home for extortion and bribery.
What a horrible way to go to prison. At least if you are trading on insider information or stealing your clients’ money, you become filthy rich (Not an endorsement, FBI and SEC, definitely do not do that). This guy felt a little tingle in his nuts and tried telling a global IB to not get in on the action. Six months in prison and a potential lifetime sussy from the investment industry is a tough deal for an even tougher guy.
If there is one thing you can learn here, it is that you never bet against Jeff Bezos. That guy will crucify your investments and likely your wife’s cervix.
Stay Poor People, or in the case of Dan Kamensky, do not drop the soap.
Standardly Poor 