Michael Lauer, who oversaw the Lancer Management Group and Lancer Management Group II, was accused in September 2008 of being the architect behind a $1.1 billion investment fraud.
A summary judgment against Mr Lauer found that he had materially overstated the valuations of his hedge funds between 1999 and 2002, that he manipulated the prices of seven securities that made up the funds' portfolios between November 1999 and April 2003 and that he had falsely represented the funds holdings and distributed fake portfolio statements to investors.
The SEC said investors lost around $500 million as a result of Mr Lauer's fraudulent actions.
US district judge Kenneth Marra ordered that he pay over $43.6 million to return "ill-gotten gains", plus a further $18.9 million in prejudgment interest.
David Nelson, director of the SEC's Miami office, said: "This is a victory for investors and a cautionary tale for hedge fund managers who line their pockets with ill-gotten gains."