Deloittes withdraws audits as US fund manager is accused of fraud by SEC

The firm, which audited the Manhattan Investment Fund through its offshore subsidiary, is conducting an internal inquiry, according to reports in US papers today.

Deloittes has also quit as auditor at the request of the fund 10 days ago having withdrawn its audits for 1996-98.

According to the US Securities and Exchange Commission, fund manager Michael Berger had defrauded investors of more than $300m. The ‘massive fraud’ is said to be one of the largest ever to hit hedge fund investors.

Berger is also accused of sending fictitious statements to Deloittes and instructing accounting firm the Bear Stearns that statements didn’t reflect the entire fund, the SEC said.

Deloittes in the US has remained silent on any potential reasons for auditors failing to track irregularities at the fund, according to the reports.

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