Deloitte & Touche Tohmatsu, the accounting firm, is facing a $32m (€27m) settlement bill to investors over the collapse of a hedge fund at the height of the technology boom.

Deloitte & Touche Bermuda was auditor to the Manhattan Investment Fund, a hedge fund that blew up in 2000 after losing $400m from short-selling technology stocks through the dot-com bubble of the late 1990s. Investors have been unable to sue Michael Berger, the fund's fugitive manager, who has been on the run from justice since he disappeared last year.