Officials last night began the process of liquidating any remaining assets in Bernard L. Madoff Investment Securities, the company at the centre of an alleged $50 billion (£32.7 billion) fraud as the Wall Street broker's sons broke their silence to deny any involvement.

The Securities Investor Protection Corp (SIPC), a non-profit body which provides limited insurances to investors, has appointed Irving Picard as trustee to oversee the liquidation of Mr Madoff's brokerage firm to try and salvage any money for his former customers.

In a statement, Mr Picard said he would "work with SIPC to do what the law allows to ameliorate losses to customers".

It is unclear at this stage if any assets will be retrieved for the growing list of casualties from the alleged scam, which include Royal Bank of Scotland, HSBC and Santander, owner of Abbey.

The Securities and Exchange Commission (SEC) complaint filed against Mr Madoff states that the broker had between $200 million and $300 million that he was intending to distribute to friends, family and clients just before he was arrested.

While Bernard L. Madoff Investment Securities was understood to have $17 billion in funds under management at the beginning of 2008, the SEC said these assets have all but disappeared and that the business was believed to be trading insolvent “for years”.

Last night, Mr Madoff's sons, Mark and Andrew, who worked at the family firm and are believed to have blown the whistle on their father, issued a statement, denying knowledge of his alleged activities.

A lawyer for the brothers said they were not involved in the asset management operations of the company, and that "they were shocked to learn of his actions".

Martin Flumenbaum, of Paul, Weiss, Rifkind, Wharton & Garrison, a law firm, added: "The brothers were among the many victims of this scheme and will continue to cooperate fully with the US Attorney and the SEC in their investigations."

Mr Madoff reportedly ran the investment advisory arm of the business, through which the fraud is thought to have been perpetrated, from the 17th floor of his midtown Manhattan headquarters.

Market-making services and proprietary trading divisions were based on the 18th and 19th floors, and worked together, but there was little or no interaction with the 17th floor.

The SEC complaint filed against Mr Madoff said he kept the company's financial statements "under lock and key" and was "cryptic" about the investment advisory business.

Attention has also been turned on others who worked with Mr Madoff. A criminal investigation has been launched into Friehling & Horowitz, the auditor used by Mr Madoff.

Friehling & Horowitz is a three-person firm based in single office in a northern suburb of New York. It was responsible for auditing the estimated $17 billion of assets under Mr Madoff's management.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts