New York (CNN Business)Dan Kamensky, founder of hedge fund Marble Ridge Capital, was arrested and charged with fraud, extortion and obstruction of justice in connection to Neiman Marcus’s bankruptcy bid, the US Department of Justice announced Thursday.

The charges are part of an alleged bid-rigging scheme tied to the retailer’s bankruptcy. According to the Justice Department, Kamensky sought to suppress a rival bid for Neiman’s MyTheresa assets so that Marble Ridge could secure the shares for a lower price. Then he attempted to coerce the rival bidder to cover up the alleged scheme, the DOJ said.Kamensky has been charged with one count of fraud in the offer or sale of securities, one count of wire fraud, one count of extortion and bribery in connection with a bankruptcy and one count of obstruction of justice. Each count carries a maximum sentence ranging from 5 to 20 years in prison. A spokesperson for Marble Ridge declined to comment on the charges. Read MoreThe alleged scheme was revealed last month in a Justice Department watchdog report, which prompted Marble Ridge to shut down. The hedge fund, which had more than $1 billion in assets, sent a letter to investors on August 20 saying it would be winding down its funds, according to a Reuters report. “After much consideration, and in light of the operating environment, we have made the difficult decision to commence an orderly wind-down of the Marble Ridge funds,” Marble Ridge told its clients in the letter.Last week, Neiman Marcus filed a lawsuit against Marble Ridge Capital suing for more than $60 million in damages and to block the winding down of its funds, the Wall Street Journal reported. Neiman Marcus filed for bankruptcy in May 2020. MyTheresa, an e-commerce business, was acquired by Neiman in 2014.

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https://www.cnn.com/2020/09/03/investing/neiman-marcus-marble-ridge-bankruptcy-fraud/index.html

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