Hedge-Fund Manager Who ‘Came Undone’ Is Headed to Prison

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On a summer Friday afternoon last year, hedge-fund manager Dan Kamensky broke bankruptcy laws. That evening on a recorded line, he pleaded with a banker to say the whole thing was a misunderstanding.

“Maybe I should go to jail,” Mr. Kamensky said on the call.

Mr. Kamensky reports to federal prison on June 18. His hedge fund is in the process of closing, and a career that included stints at white-shoe law firm Simpson Thacher & Bartlett and storied hedge fund Paulson & Co. has been wrecked.

“He came undone,” U.S. District Judge Denise Cote said during a court hearing on May 7.

Mr. Kamensky, 48 years old, worked in the high-stakes, high-conflict world of distressed investing, which aims to profit from companies teetering on the brink of or in bankruptcy. He launched his hedge fund, Marble Ridge, in 2015 with $20 million and was managing nearly $1 billion a few years later.

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