Hedge Funds

Deephaven may face SEC charge over PIPEs


Deephaven Capital Management may face charges for allegedly misleading investors in its Market Neutral Master Fund, according to a recent filing with the Securities and Exchange Commission by the asset-management shop's parent Knight Trading.

The disclosure filing said that the SEC may recommend civil action against Deephaven for allegedly violating anti-fraud provisions. The alleged violation, according to Knight's SEC filing, involved the trading of PIPEs in the Deephaven portfolio between mid-1999 and the first quarter of 2004.

The Deephaven fund stopped trading PIPEs entirely in the last quarter of 2004, according to the regulatory filing.