NEW YORK (Bloomberg) — Auditors KPMG LLP and Ernst & Young LLP won dismissal of a fraud lawsuit brought against them by investors in Tremont Group Holdings Inc., which invested with convicted money manager Bernard Madoff.

US District Judge Thomas Griesa in Manhattan yesterday tossed out a complaint against the auditors of Tremont funds brought by Tremont investors. He said the investors failed to allege enough facts in their complaint to show that the auditors had the intent to "deceive, manipulate or defraud."

The investors sought to hold the auditors liable for failing to detect Madoff's massive fraud, not notifying them of risks associated with Madoff's funds, and not complying with professional auditing standards that would have uncovered Madoff's Ponzi scheme.

"The auditors were never engaged to audit Madoff's businesses or to issue an opinion of the financial statements" of Madoff's firm, Griesa wrote in a 19-page opinion. The investors "do not allege that the auditors were aware of any facts indicative of Madoff's fraud that they consciously disregarded."