Former Nasdaq chairman Bernard Madoff has been charged with running a $50 billion (£33.7 billion) fraudulent investment scam.

Madoff, a long-time powerful Wall Street figure, told staff at his investment firm that a hedge fund he ran was "all just one big lie" and that it was "basically, a giant Ponzi scheme" with estimated investor losses of about $50 billion, according to a criminal complaint against him.

A Ponzi scheme is a pyramid-type scam in which very high returns are promised to early investors, who are paid off with money put up by later ones. The $50 billion allegedly lost by investors would make Madoff's fund one of the biggest frauds in history. When Enron filed for bankruptcy in 2001, one of the largest at the time, it had $63.4 billion in assets.

Prosecutors charged Madoff, 70, with a single count of securities fraud, for which he faces up to 20 years in prison and a fine of up to $5 million if convicted.

Lev Dassin, acting Attorney General for the Southern District of New York, said: "Madoff stated that the business was insolvent, and that it had been for years."

His lawyer, Dan Horwitz, said outside the Manhattan court where Madoff was charged: "He is a long-standing leader in the financial services industry. We will fight to get through this unfortunate set of events."

Madoff stared at the ground as reporters asked questions. He was released after posting a $10 million bond secured by his Manhattan flat.