The former chairman of Nasdaq has been charged with running a $50 billion (£33.7 billion) investment scam.

Bernard Madoff ran an investment advisor business, managing assets of around $17.1 billion.

However, Mr Madoff is accused of running the business fraudulently for years, racking up losses of $50 billion before finally admitting to two senior employees that he was “finished,” that he had “absolutely nothing,” that “it’s all just one big lie,” and that it was “basically, a giant Ponzi scheme.”

A Ponzi scheme, named after Charles Ponzi, pays out large profits to investors by using money from new investors.

The Securities and Exchange Commission said it is seeking emergency relief for investors, including an asset freeze and the appointment of a receiver for the firm.

“We are alleging a massive fraud – both in terms of scope and duration,” said Linda Chatman Thomsen, director of the SEC’s division of enforcement.

“We are moving quickly and decisively to stop the fraud and protect remaining assets for investors, and we are working closely with the criminal authorities to hold Mr Madoff accountable.”

Andrew Calamari, associate director of enforcement in the SEC’s New York regional office, added, “Our complaint alleges a stunning fraud that appears to be of epic proportions.”

According to the Associated Press, FBI Agent Theodore Cacioppi arrived Thursday at Mr Madoff’s apartment.

“After I stated, ‘We’re here to find out if there’s an innocent explanation,’ Madoff said, ‘There is no innocent explanation,’” the agent stated.

“Madoff stated, in substance, that he had personally traded and lost money for institutional clients, and that it was all his fault,” Agent Cacioppi added.

However, Mr Madoff’s lawyer, Dan Horwitz, said he intends to fight the charge.

Mr Madoff faces up to 20 years in prison if convicted.