Prosecutors seek pre-trial jail for Madoff

Prosecutors seek pre-trial jail for Madoff

NEW YORK - US prosecutors on Monday asked a judge to imprison financier Bernard Madoff, saying he has violated his bail as he awaits trial on charges that he operated a massive Wall Street fraud.

The New York federal judge said he would make a decision after prosecutors and the defense provided more information. He asked for the additional materials by midday Thursday, the prosecutor's office said.

Madoff, 70, was arrested December 11 after allegedly admitting he had run a multi-billion dollar Ponzi scheme, or pyramid fraud, in which individual investors, banks, charities and universities lost fortunes.

He was released on a 10 million dollar bail and placed under house arrest in his luxury Manhattan apartment. He has also had his assets frozen under a parallel civil case.

Prosecutors said Monday that Madoff and his wife sent watches, jewelry and other valuables to his brother, his sons and a couple in Florida, the Wall Street Journal reported.

Madoff's lawyer, Ira Sorkin, told the court the items had been sent "innocently" and did not violate the bail, The Journal reported.

Meanwhile, the head of the US stock market watchdog told a congressional hearing that he would quickly detail regulators' failings in the case.

"I absolutely agree that this matter has to be dealt with very expeditiously," David Kotz, inspector general for the Securities and Exchange Commission, said.

Incensed lawmakers called the hearing to question why the SEC failed to stop the matter sooner.

Kotz said, "I would hope that we would be able to get something out in a matter of months, certainly not years."

"We will also look at whether Mr Madoff's stature and reputation had any impact," he added.

"I can assure you that our investigation and review will be independent and as hard-hitting as necessary. While we approach these efforts with an open mind and at this stage of the investigation we have not reached any conclusions or made any findings, the matters that have been brought to our attention require careful scrutiny and review."

The failure of the SEC drew harsh words from some lawmakers.

Representative Carolyn Maloney said that "when the key regulator is totally asleep even when whistle blowers are calling and trying to alert them, as was the case before us with the Madoff case, we would like to think that there were some checks and balances in our complex regulatory system."

Stephen Harbeck, president of the Securities Investor Protection Corp, an insurance fund for the investment industry, told the hearing some investors may get reimbursed in the case but that the limit for any protection would be 500,000 dollars.