In a civil complaint, the SEC alleged that Cohmad Securities Corporation, a registered broker-dealer, and three of its top employees, ignored and even participated in suspicious practices indicating fraud as they brought investors to Mr Madoff in exchange for hundreds of millions of dollars in fees, the FT said.

The case adds to a mounting pile of litigation that has been prompted by Mr Madoff’s fraud, which some reports estimate comprised a sum of $65 billion, snaring investment firms, private banks and individuals. The case has led to calls for greater focus by the financial industry on due diligence checks on investments.