House Arrest for Madoff in $7 Million Apartment

Dec. 17, 2008— -- Bernard Madoff, accused of the largest fraud in U.S. history, will be allowed to remain in his $7 million Park Avenue apartment instead of being sent to jail, under terms of an agreement announced today by federal prosecutors.

Click here to see Madoff being pushed by a photographer upon returning to his residence.

Madoff was unable to meet the bond conditions set last week by a federal magistrate which required him to get four people to sign his personal recognizance bond.

According to the U.S. Attorney's office, only Madoff's wife and brothers were willing to sign the document. But instead of ordering him held in jail, prosecutors agreed to home detention with electronic monitoring.

In related news, the Securities and Exchange Commission chairman said today the agency has found "no evidence of wrongdoing by any SEC personnel" in connection with Madoff's alleged $50 billion Ponzi scheme and that the SEC intends to get to the bottom of where it may have gone wrong.

"I was very concerned to learn this week that credible allegations about Mr. Madoff had been made over nearly a decade and yet never referred to the commission for action," Commissioner Christopher Cox said at a press conference.

Yesterday, Cox acknowledged what amounted to a generational failure on the part of the SEC to discover any hint of Madoff's scheme, despite allegations dating back to 1999. In his statement, Cox said that he had turned the investigation into what might be an institutional lack of rigor over to the inspector general for the SEC.

"We have asked, in addition to investigating the allegations that had been made, over a period of many years, about Mr. Madoff and the way that they were handled," Cox told reporters today. "Also questions about the policies under which they were handled, whether or not all of the actions of SEC professionals were in compliance with those policies and, if so, what changes need to be made to the policies to make sure that we can get better results with such information in the future."

Having received the case less than 24 hours ago, Security and Exchange Commission Inspector General David Kotz told ABC News that his office has barely begun the process of selecting the staff, identifying the key areas to target, and determining the way in which the IG will proceed in attempting to unravel what other authorities have termed "nearly a generation of systemic and policy failure" at the SEC.

In terms of his new bond conditions, Madoff and his luxury apartment on Manhattan's upper east side will be fitted with an electronic monitoring device by the court's pre-trial services and Madoff will be under a curfew of between 7 p.m. through 9 a.m.

Madoff's wife agreed to post the mansions in her name in Palm Beach, Florida and in Montauk on New York's Long Island.

Madoff reportedly admitted to FBI agents last week that he had single-handedly pulled off a $50 billion scheme, defrauding a long list of investors.

Madoff made headlines last week when an unsealed criminal complaint in federal court in New York charged that he has been running a decades long Ponzi scheme that defrauded investors of $50 billion dollars.

A former chairman of NASDAQ, Madoff was an investment advisor who catered to a handful of high net worth clients, one of whom told ABC News that Madoff was so sought after that, as recently as two months ago, he was turning down potential new business. His handful of clients routinely expected -- and received -- double digit returns, up market or down.