Kenneth D. Pasternak is an American financial executive and entrepreneur. He is a co-founder along with Walter Raquet of Knight Trading Group, and also served as its chairman and CEO.
Early life and education
Pasternak was born to a
Jewish
Jews ( he, יְהוּדִים, , ) or Jewish people are an ethnoreligious group and nation originating from the Israelites Israelite origins and kingdom: "The first act in the long drama of Jewish history is the age of the Israelites""The ...
family in
Manhattan
Manhattan (), known regionally as the City, is the most densely populated and geographically smallest of the five boroughs of New York City. The borough is also coextensive with New York County, one of the original counties of the U.S. state ...
Austria
Austria, , bar, Östareich officially the Republic of Austria, is a country in the southern part of Central Europe, lying in the Eastern Alps. It is a federation of nine states, one of which is the capital, Vienna, the most populous ...
and fled the Nazis immigrating first to
Israel
Israel (; he, יִשְׂרָאֵל, ; ar, إِسْرَائِيل, ), officially the State of Israel ( he, מְדִינַת יִשְׂרָאֵל, label=none, translit=Medīnat Yīsrāʾēl; ), is a country in Western Asia. It is situated ...
and then the United States in 1951 after a stint in the
British Army
The British Army is the principal land warfare force of the United Kingdom, a part of the British Armed Forces along with the Royal Navy and the Royal Air Force. , the British Army comprises 79,380 regular full-time personnel, 4,090 Gurk ...
. His mother was born in Belgium to a Polish Jewish family who was hidden from the Nazis by a Catholic institution for six years; her entire family perished in the
Holocaust
The Holocaust, also known as the Shoah, was the genocide of European Jews during World War II. Between 1941 and 1945, Nazi Germany and its collaborators systematically murdered some six million Jews across German-occupied Europe; a ...
. His parents met at a resort in the Catskills and settled in nearby
Fleischmanns, New York
Fleischmanns is a village in Delaware County, New York, United States. The population was 351 at the 2010 census. The Village of Fleischmanns is within the town of Middletown and is named after Charles Louis Fleischmann, a Hungarian manufactu ...
. His father owned a gas station where he also worked as a mechanic and sold used cars.
Pasternak received his high school diploma in 1972 from
Margaretville
Margaretville is a village in Delaware County, New York, United States. The population was 596 at the 2010 census. The village is in the town of Middletown, on the border of the Catskill Park.
Geography
Margaretville is located near the geograp ...
Central School and received a
B.S.
A Bachelor of Science (BS, BSc, SB, or ScB; from the Latin ') is a bachelor's degree awarded for programs that generally last three to five years.
The first university to admit a student to the degree of Bachelor of Science was the University of ...
degree in education from The
State University of New York at New Paltz
The State University of New York at New Paltz (SUNY New Paltz or New Paltz) is a public university in New Paltz, New York. It traces its origins to the New Paltz Classical School, a secondary institution founded in 1828 and reorganized as an a ...
in 1977. He moved to Ridgewood, New Jersey where he renovated a home and then moved to
Jersey City, New Jersey
Jersey City is the second-most populous city in the U.S. state of New Jersey, after Newark.Spear, Leeds & Kellogg
Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...
where he started as a librarian. Pasternak eventually worked his way up to senior vice president, limited partner, and trading room manager. He worked at
Spear, Leeds & Kellogg
Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...
until 1994. In 1999, Kenneth Pasternak, was named "Emerging Entrepreneur Of The Year" by
Ernst & Young
Ernst & Young Global Limited, trade name EY, is a multinational professional services partnership headquartered in London, England. EY is one of the largest professional services networks in the world. Along with Deloitte, KPMG and Pricewaterh ...
.
Knight Securities
In 1994, Pasternak co-founded Knight Trading Group along with Walter Raquet, which benefited exponentially from the advent of internet trading. Knight Trading went public in 1998 with a market capitalization of $7 billion. Pasternak served as the company's chief executive officer from its founding in 1995 until he retired on January 21, 2002. Pasternak also served on the company's board of directors from 1998 until January 31, 2002. Under his leadership, Knight became the leading wholesale market maker in the United States securities markets. Pasternak and Raquet also took the company public in 1998 under the ticker symbol NITE, and its market capitalization exceeded $5 billion.
In April 2000, Pasternak presented testimony to the US Senate Banking Committee on Competition and Transparency in the Financial Marketplace of the Future. In May 2001, Pasternak presented testimony to the U.S. Senate Committee on Banking, Housing and Urban Affairs regarding the implementation and future of decentralized markets. In 2001, Pasternak was ranked 9th on Forbes' financial services executive pay list, and number 51 overall, with a total compensation package of $26,488,000; this included a base salary of $250,000 and a cash bonus of $26,213,000. Because he owned founders' stock he was compensated primarily in cash, and in terms of cash, he was the highest paid CEO in 2001. Other notable financial services executives on this list included Henry Paulson Jr., the CEO of Goldman Sachs who ranked 70th on the list.
Pasternak served on the board of directors of NASDAQ in 2001–2002 and the NASD board of governors in 2001–2002, and was an early-stage investor in the
International Securities Exchange
International Securities Exchange Holdings, Inc. (ISE) is a wholly owned subsidiary of American multinational financial services corporation Nasdaq, Inc. It is a member of the Options Clearing Corporation (OCC) and the Options Industry Council ...
(ISE) in 1999.
In 2001, Kenneth Pasternak retired as CEO of Knight Trading Group. As described in
Edgar Perez
Edgar Perez (born February 7, 1974) is an American-Peruvian business author, keynote speaker and corporate trainer who has spoken at a number of academic and professional institutions. He is the author of '' The Speed Traders'' and ''Knightmare o ...
’s book, ''Knightmare on Wall Street: The Rise and Fall of Knight Capital and the Biggest Risk for Financial Markets'', Pasternak claimed he didn’t expect to be CEO of a big company. “I was already looking for an opportunity to retire. I always saw myself as a business builder. I had some health issues. I had diabetes and weighed 325 pounds.”
Chestnut Ridge Capital
After retiring from Knight Trading Group, seeing a credit bubble, Pasternak founded Chestnut Ridge Capital, LLC, a northern New Jersey-based hedge fund, which also serves as the investing arm of the Pasternak family office.
The KABR Group
In 2008, seeing that there was opportunity to purchase distressed real estate at a discount, Pasternak founded the real estate investment firm KABR Real Estate Investment Partners LLC. The firm was started with partner Adam Altman where Pasternak serves as CEO and Chairman. KABR Group is dedicated to the purchase of select real-estate assets in the Metro NYC and Greater Jacksonville areas. KABR I was the first marketed product to come out of Chestnut Ridge Capital LLC, and was succeeded by later funds - KABR II through KABR V. Ken Pasternak owns a significant portion of both the General Partner ("GP") and Limited Partner ("LP") portions of each of the KABR Funds. The combined Fair Market Value (FMV) of KABR Funds II - V and other GP managed assets is approximately $1 billion as of 2/18/22.
On June 1, 2009, KABR closed a deal to purchase 85 Challenger Road - a office building in
Ridgefield Park, NJ
Ridgefield Park is a village in Bergen County, New Jersey, United States. As of the 2010 United States census, the village's population was 12,729,NJ Turnpike and was formerly occupied by the Daewoo Corporation. KABR purchased the building from AIG for "...the right price" according to Pasternak - though the purchase price was undisclosed at the time - it was later reported to be approximately $10.5mm.
On October 25, 2020, KABR sold the 85 Challenger Road office building in
Ridgefield Park, NJ
Ridgefield Park is a village in Bergen County, New Jersey, United States. As of the 2010 United States census, the village's population was 12,729,Samsung Electronics
Samsung Electronics Co., Ltd. (, sometimes shortened to SEC and stylized as SΛMSUNG) is a South Korean multinational corporation, multinational electronics corporation headquartered in Yeongtong-gu, Suwon, South Korea. It is the pinnacle of ...
America - whose tenancy KABR renewed in 2019.
Belleayre Resort
Pasternak is a general partner in the development of the Belleayre Resort at Catskill Park, NY where Crossroads Ventures is developing a $394,000,000 destination resort.
SEC investigation
Pasternak faced a series of investigations brought by the NASD and the
Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
for supervisory violations stemming from allegations brought by an ex-employee. The NASD fined Pasternak $100,000 for each supervisory violation. However, a federal court ruled that Pasternak was not liable for any violation. On March 5, 2010, Financial Industry Regulatory Authority (FINRA) council reversed a ruling that found two former Knight Securities LP senior executives were responsible for supervisory failures in connection with allegedly fraudulent sales to institutional customers.
The Star-Ledger
''The Star-Ledger'' is the largest circulated newspaper in the U.S. state of New Jersey and is based in Newark. It is a sister paper to ''The Jersey Journal'' of Jersey City, ''The Times'' of Trenton and the '' Staten Island Advance'', all of wh ...
'', June 12, 2008. Accessed September 20, 2011. "The Securities and Exchange Commission had sued Kenneth Pasternak, a Saddle River resident who now runs a hedge fund, and another former Knight executive in 2005, accusing Pasternak of allowing improper trading at the Jersey City firm during the tech boom in 1999 and 2000."