Some of the biggest-name fund managers in the world, including Nicola Horlick, Man Group, Santander and Union Bancaire Privée, have been caught up in an alleged $50bn (£33bn) fraud after trusting Bernard Madoff, the Wall Street trader arrested this week.

Many wealthy investors in Switzerland, Spain, Israel and Austria, in particular, were tempted to invest in funds which produced such steady returns that sceptics believed them too good to be true and in what could potentially be the biggest fraud in corporate history.