HOWZAT

Mr. Swanson worked at the SEC for 10 years before leaving in 2006.

As Democrat chairman of the committee, Mr Dodd has the power to subpoena key officials from the SEC, including the current chairman, Mr Cox.

In such an event, they would be forced to answer questions in public testimonies to account for their behaviour. Mr Cox is already in his final days of office given that new US Presidents appoint their own chairman of the financial regulator.

Some regulators have speculated that Mr Madoff may have run a second investment advisory business which was never registered with regulators.

However, the scandal remains painfully embarassing to the SEC because Mr Madoff once served on one of their advisory committees.

As hostility grew against the SEC and its failure to detect the alleged fraud, a scheduled court hearing at which Mr Madoff was expected to fulfil final conditions of his bail agreement, was adjourned until 2pm local time today (7 pm UK time).

Mr Madoff, who was released on $10 million bail at the end of last week, is scheduled to return to the 500 Pearl Street court house in downtown Manhattan to complete court papers today.

Under the terms of his bail, he is not permitted to stray far outside the New York state boundaries. It is believed that he is staying at his smart Upper East Side apartment, located on the corner Lexington Avenue, and just blocks away from central park.

Over the last few years, the financier built up an investment business where he told clients - who had to invest a minimum of $1 million - that he was buying blue chip stocks and treasury bonds on their behalf and hedging against potential losses with options contracts.

The regulators who are belatedly investigating the alleged fraud, who include the SEC and the Federal Bureau of Investigation, believe that Mr Madoff did not make any investments on his clients' behalf but took cash from new customers to pay the 12 per cent returns he had promised existing clients.

Such a scheme is only sustainable so long as there are sufficent new clients entering the scheme to provide fresh capital.

On Monday evening, a US judge liquidated the investment business and Mark and Andrew - Mr Madoff's sons - issued a statement through their lawyer insisting that they were victims of the scheme rather than perpetrators.

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