TWO directors of Bernard Madoff’s London-based trading business are believed to be among the victims of their former employer’s alleged $50 billion (£33 billion) fraud.

A Serious Fraud Office investigation was launched last week into the business operations of Madoff Securities International, run from a recently refurbished office in Mayfair. It is also launching an investigation into British victims of the affair.

The probe followed a report from accountancy firm Grant Thornton, which was appointed as liquidator to the group’s London business after Madoff was turned in to the US authorities.

Sources close to the London business claim senior figures at the firm invested their own money in the Madoff investment scheme. They join a long list of victims around the world that includes everyone from Hollywood actor Kevin Bacon to Spanish banking giant Santander.

Records at Companies House confirmed last week that Madoff was forced to resign from the board of the UK firm on December 16. His brother Peter and sons Andrew and Mark also resigned on the same day.

The London operation still holds more than £20m in cash deposits with a handful of British banks, including Barclays, which acted as its prime broker.

Although this cash could eventually contribute towards a pot to compensate investors, it is frozen pending the outcome of investigations on both sides of the Atlantic.

Directors of the London firm also thought they owned about $150m of US Treasuries, held at an account with Madoff’s brokerage business in New York.

The brokerage business was supposedly run separately from the investment-management arm where Madoff allegedly committed the fraud.

The Treasuries were bought on November 12 after Madoff instructed that his assets be moved out of sterling into dollars. The London business was given all the appropriate documentation by Madoff’s New York brokerage to confirm the trade. However, liquidators at Grant Thornton have yet to track down the assets.

It has also emerged that Madoff informed his brother of the alleged fraud one day before confessing to his sons, who then handed him in to the US authorities.

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