Some of the world's wealthiest private and corporate investors are reported to be victims of an alleged $50bn fraud by Wall Street broker Bernard Madoff.
Mr Madoff is alleged to have confessed to a huge Ponzi scheme fraud.
Reports say the main owner of the New York Mets baseball team, Fred Wilpon, and former American football team owner Norman Braman are among the victims.
Others facing losses reportedly include French bank BNP Paribas, Japan's Nomura Holdings and Zurich's Neue Privat Bank.
Prosecutors say Mr Madoff, ex-head of the Nasdaq stock market, has described the fraud as "one big lie".
A federal judge has appointed a receiver to oversee Mr Madoff firm's assets and customer accounts, while the 70-year-old banker has been released on $10m bail.
Shares drop
Hundreds of people are thought to have invested with Mr Madoff, among them international banks, hedge funds and wealthy private investors - who are all trying to find out the cost of the alleged fraud.
"There are people who were very, very well off a few days ago who are now virtually destitute"
Spanish newspapers said the leading bank Santander had invested with Mr Madoff.
Bramdean Alternatives, a UK-based asset management company run by Nicola Horlick, saw its share value drop by over 35% after it revealed that nearly 10% of its holding was exposed to the New York broker.
One hedge fund, Fairfield Greenwich Group, said its clients had invested $7.5bn with the firm.
'Major disaster'
Lawyers for worried investors fearful that they had lost their savings, attended court on Friday for a hearing on the disposition of Mr Madoff's remaining assets.
The hearing was cancelled after an agreement was reached to appoint a receiver.
"The collapse of Madoff is likely to accelerate the disappearance of hedge funds"
Brad Friedman, a lawyer for some of the investors, said: "There are people who were very, very well off a few days ago who are now virtually destitute.
"They have nothing left but their apartments or homes - which they are going to have to sell to get money to live on," he told the New York Times.
One investor, Lawrence Velvel, 69, told the Associated Press that he and a friend may have lost millions of dollars between them.
"This is a major disaster for a lot of people. You work all your life, you finally manage to save up something ... lots of people are getting fully or partially wiped out."
'Pyramid scheme'
Mr Madoff founded Bernard L. Madoff Investment Securities in 1960, but also ran a separate hedge fund business.
According to the US Attorney's criminal complaint filed in court, Mr Madoff told at least three employees on Wednesday that the hedge fund business - which served up to 25 clients and had $17.1bn under management - was a fraud and had been insolvent for years, losing at least $50bn.
He said he was "finished", that he had "absolutely nothing" and that "it's all just one big lie", and that it was "basically, a giant Ponzi scheme", the complaint said.
He told them that he planned to surrender to the authorities but not before he used his last $200m-$300m to pay "selected employees, family and friends".
Under a Ponzi scheme, which is similar to pyramid schemes, investors are promised very high returns on their investment, while in reality early investors are paid with money collected from later investors.
If found guilty, US prosecutors say he could face up to 20 years in prison and a fine of up to $5m.
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