Disgraced Wall Street investment manager Bernard Madoff, accused of orchestrating a $50 billion fraud, was put under house arrest last night.
BNP Paribas SA became the latest European bank to reveal its exposure to the scandal, and its stock was the main loser among Europe's top banks, as the chairman of the US Securities and Exchange Commission again answered questions about why the alleged fraud went on for a decade.
A federal judge ordered Madoff, 70, confined to his $7 million Manhattan apartment and told Madoff's wife, Ruth, to surrender her US passport by noon today as part of modified bail conditions.
Madoff will be fitted with an electronic ankle bracelet and will only be allowed to leave his home for appointments prearranged with authorities.
Bloomberg reported that Ruth Madoff is being investigated by the SEC over whether she helped maintain secret records used in the alleged fraud, citing a person familiar with the matter.
Yesterday afternoon, the Madoffs signed an agreement to forfeit their Manhattan apartment and properties in Montauk, New York and Palm Beach, Florida if they failed to adhere to the bail conditions.
Bernard Madoff was filmed by television crews leaving the federal court in Manhattan, but he did not talk to reporters. With a calm expression on his face, he sat in the front passenger seat of a black SUV that sped away.
He later was seen by news photographers getting out of a vehicle near his apartment building. Mr Madoff walked briskly with a slight smile on his face as photographers jostled to take his picture before he entered the front door of the building.
The changes in bail conditions for the one-time Nasdaq Stock Exchange chairman were ordered as angry investors urged prosecutors to take a firmer stance.
"The investors I am speaking with are extremely upset and think he should be in jail today," said Ross Intelisano, a partner at law firm Rich & Intelisano LLP said. "They think he is a flight risk, and they are shocked that the bail is so low."
On Tuesday, SEC chairman Christopher Cox offered an embarrassing mea culpa for the agency's lack of oversight of Madoff's investment advisory firm, Bernard L. Madoff Investment Securities LLC.
He said yesterday there was no evidence that SEC staff did anything wrong amid accusations the regulator failed to act on tips of alleged fraud by Madoff in the past 10 years.
"I want to emphasize that there is no evidence that anyone is aware of at this point that any personnel did anything wrong," Cox told reporters after an agency meeting.
He said he was still troubled that the securities watchdog did not catch the scandal earlier. "I was very concerned to learn this week that credible allegations about Madoff had been made over nearly a decade and yet never referred to commission for action".
Agencies