A prominent Wall Street adviser who served as vice-chairman of the National Association of Securities Dealers and chaired Nasdaq's trading committee has been charged with securities fraud after prosecutors said they had uncovered an "epic" deception that has cost investors at least $50 billion.
In a statement, the Securities and Exchange Commission (SEC) said Bernard L Madoff and his firm - Bernard L Madoff Investment Securities - were charged after the broker apparently admitted to "two senior employees" that he had been running "a giant Ponzi scheme", paying returns to investors using the principal of other investors.
The Wall Street Journal reports that the "employees" were Mr Madoff's two sons.
Mr Madoff, who formed his investment firm in 1960, is also alleged to have admitted that the company has been insolvent for years.
It added that regulatory filings for the firm show it had assets worth more than $17 billion at the start of the year, adding that "virtually all" of these assets are now missing.
SEC director of enforcement, Linda Chatman Thomsen, said: "We are alleging a massive fraud - both in terms of scope and duration."
The investigation continues.
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