Madoff, 46, was found dead at his Manhattan apartment, while his two-year-old son slept in an adjoining bedroom, said a spokesperson for the New York City Police Department, according to reports.

Mark Madoff and his brother, Andrew, were under investigation but hadn’t faced any criminal charges related to the Ponzi scheme that led to their father being jailed for 150 years in the biggest financial crime to have emerged from the credit crisis.

The sons, along with Bernard Madoff’s brother and five directors of the UK arm of Bernard Madoff’s investment firm, were sued on 8 December by Irving Picard, the court-appointed trustee recovering assets for Madoff’s victims.

Picard said last week he has struck an agreement with Union Bancaire Privee, and a related Caymans entity, M-Invest Ltd, involving a payment to his clients of up at least $470 million, and possibly $500 million in total. The settlement involves at least $470 million in cash and could reach $500 million depending on the outcome of other related actions.

The trustee is also suing HSBC for $9 billion, media reports said, adding to a recent suit brought against UBS and JP Morgan.