Deephaven Capital Management has agreed to pay $5.8 million in penalties and disgorgement to settle charges by the Securities and Exchange Commission that the Minnetonka, Minn.-based hedge fund and its former portfolio manager, Bruce Lieberman, engaged in insider trading in private investments in public equity stock offerings. According to the SEC, the defendants learned confidential nonpublic information about the upcoming PIPE offerings from placement agents for 19 companies and shorted those companies’ shares on behalf of the Deephaven Small Cap Growth Fund. Without admitting or denying the charges, Deephaven has agreed to disgorge $2.7 million in unlawful profits, an equal amount in civil penalties and $343,000 in prejudgment interest. In addition, Lieberman will pay a $110,000 civil penalty and will be barred from the industry for three years.

Meanwhile, another hedge fund has been ordered to pony up a total of $1.4 million to the SEC as a federal judge in Georgia entered a default judgment against hedge fund manager Barry Bingham and Georgia-based Bingham Capital Management for defrauding almost two dozen investors in Bingham Growth Partners through misrepresentations about the fund’s past returns.