By Patrick Yoest

December 17, 2008

WASHINGTON (Dow Jones)--A House lawmaker said Wednesday he will start an investigation into New York financier Bernard Madoff's alleged $50 billion fraud of investors through his fund and the oversight by regulators of the group.

Rep. Paul Kanjorski, D-Pa., who chairs the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, said he will begin looking into fraud allegations by Bernard L. Madoff Investment Securities LLC "as soon as possible in the next Congress," which begins on Jan. 6.

"The news reports in recent days that Mr. Madoff stands at the center of a $50 billion Ponzi scheme are deeply disturbing," Kanjorski said in a statement. "Unfortunately, these events have only further weakened already-battered investor confidence in our securities markets, and they have raised even more troubling questions about the effectiveness of our regulatory system."

Kanjorski's announcement comes hours after Securities and Exchange Commission Chairman Christopher Cox announced an investigation into his agency's handling of complaints about Madoff, including contacts between agency staff and Madoff's family.

Kanjorski in his statement alluded to the SEC's role in overseeing Madoff's firm, stating "we must also understand why the U.S. Securities and Exchange Commission, other regulators, and additional participants in the securities markets failed to detect these substantial evasions before innocent investors and charitable organizations were substantially harmed."