New York - The brokerage of alleged Wall Street fraudster Bernard Madoff will be liquidated to help compensate his victims, officials said Monday.
A New York judge ruled in favour of a liquidation request by the Securities Investor Protection Corp (SIPC), a government-funded organisation that protects brokerage clients.
Madoff, 70, a major Wall Street broker, was arrested Thursday for running a $50bn Ponzi scheme.
He claimed he had only $200 to $300m left, while prosecutors were uncertain how much money Madoff's clients, among them banks, prominent investors and celebrities, have lost.
The SIPC guarantees compensation of up to $500 000 per client, but the losses of many fraud victims are believed to be significantly higher.
According to the Wall Street Journal, entrepreneur Carl Shapiro was the biggest loser with $545m invested. Sources close to Shapiro said the 95-year-old may have lost half his assets.
Shapiro, who had been friends with Madoff for 50 years and made his fortune in the late 1930 with the Kay Windsor fashion label, said he was "shocked and sad."
Hollywood director Steven Spielberg and his business partner Jeffrey Katzenberg, head of the DreamWorks Animation studio, were also believed to be among Madoff's victims, the Journal said.
Bernard L Madoff Investment Securities LLC, operated as an international market broker with a separate investment advisory business for private clients. The advisory business was kept secretive by Madoff and served between 11 and 25 clients with $17.1bn under his management.