The man behind the Manhattan Investment Fund scandal has been ordered to repay $20 million by the Securities and Exchange Commission in the United States.

The federal securities regulators announced on Wednesday that a New York judge had ordered Michael Berger, the former investment manager of the Manhattan Investment Fund hedge fund, to pay up the millions.

He also accused the 30-year-old Austrian of hiding millions of dollars in losses in a civil court case.

Mr. Berger, who lives in Manhattan, lost $400 million of investors' money by betting the wrong way on Internet stocks and pleaded guilty to securities fraud a year ago, but is still subject to criminal proceedings.

The hedge fund Mr. Berger ran was registered in the British Virgin Islands but administered and audited by Bermuda companies.

The scandal was unearthed after Deloitte & Touche LLP, the Bermuda auditors of the fund, withdrew approval of the fund's financial statements for 1996, 1997 and 1998.

A subsequent investigation by fund administrator and local Ernst & Young affiliate Fund Administration (Bermuda) Inc. revealed the extent of the losses and accused the fund's managers of misrepresentation.

In January 2000 Mr. Berger admitted the fund had lost $500 million after previously claiming it had made massive profits.

On Wednesday Judge Denise Cote found that Berger's trading strategy resulted in the fund ultimately losing $400 million, the Securities and Exchange Commission said.

But instead of accurately reporting the losses, Berger created fictitious account statements which substantially overstated the market value of the fund's holdings, the SEC added.

It is believed Mr. Berger pulled the wool over the eyes of his administrators and accountants by simply changing his fax number on his machine and faxing through fake copies of his audits.

The judgment in the SEC's civil case found Berger liable for securities fraud.

The $20 million he was ordered to repay represented management and incentive fees that Manhattan Capital Management (MCM), the New York-based advisory firm controlled by Berger, was paid by the fund as well as $132,498 in interest.

He, MCM and the fund were sued by the commission in January 2000. Judge Cote said he found that Berger caused a fictitious account statement to be forwarded to the fund's administrator in Bermuda every month for 39 consecutive months.

The administrator then calculated the fund's net asset value and the market value of each investor's shares based on Berger's fabricated figures, and sent monthly account statements based on these calculations to the fund's investors.

According to the SEC, the judge concluded that "the fraud was conceived and executed in New York by Berger" and that "Berger acted wilfully and knowingly in carrying out the fraud".

In her order, Cote found that Berger began his scheme almost immediately after the fund began operations in mid-1996.

Both MCM and the fund are currently involved in Chapter 11 bankruptcy proceedings, the commission added.

At the age of 23, Mr. Berger started convincing investors to invest in his hedge fund. He persuaded more than 300 to offer more than $575 million.

He then took much of the money and bet that stocks of Internet-related companies would fall. Instead they continued to go up and up.

Mr. Berger operated the fund from his Park Avenue offices, allowing foreign investors and tax-exempt US pension funds and trusts to invest in the short-selling of securities.

The US government said that Mr. Berger required an initial investment of $250,000 to join the hedge fund that he boasted had hundreds of millions of dollars in assets and was profitable. Prosecutors last year said it actually had assets of less than $50 million.

Mr. Berger has claimed that he fabricated accounts in the hope that his investments would turn around and that he never meant to defraud his investors.