Hedge Funds

Deephaven settles insider trading charges


Deephaven Capital Management and a former portfolio manager for the Minnetonka, Minn., hedge fund firm have settled charges of insider trading in connection with Private Investment in Public Equity (PIPE) stock offerings.

Without admitting or denying the allegations, Deephaven agreed to pay $5.7 million in penalties, interest and disgorged profits, according to the U.S. Securities and Exchange Commission. The former Deephaven portfolio manager, Bruce Lieberman, agreed to pay $110,000 in connection with the complaint.

The SEC alleged that Deephaven and Lieberman illegally profited by short selling securities in advance of the public announcements of 19 PIPE offerings between August 2001