UK investors could be nursing huge losses after being hit by a similar Ponzi scheme to that operated by Bernie Madoff.

Dennis Bolze, a stock trader from Tennessee who is being pursued by the US authorities, failed to attend a bankruptcy court hearing late last week.

About 100 unnamed investors, largely from the UK and other European countries, invested up to $20m in Centurion Asset Management, the company through which Mr Bolze said he was engaging in day trading.

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The case follows that of Mr Madoff, the Wall Street fund manager who allegedly committed the world's biggest investment fraud of $50bn through a Ponzi scheme. Some of the biggest banks, HSBC and Royal Bank of Scotland, as well as the Hollywood actor Kevin Bacon have become embroiled in the scandal. Man Group, the world's biggest hedge fund manager, is considering legal action to recover losses from Mr Madoff's activities.

A US bankruptcy court has appointed an emergency interim trustee to oversee the assets and estate of Mr Bolze. Patricia Foster, attorney for the US Trustee, told Judge Richard Stair that his investment activities "appear to be a Ponzi scheme".

Three local investors sought the appointment of an interim trustee to force Mr Bolze into bankruptcy so that his assets could be seized and sold.

The interim trustee, the retired FBI agent Wayne Walls, has been authorised to take "whatever steps are necessary to locate and preserve the assets of property" of Mr Bolze, Ms Foster said.

Mr Bolze has not been seen since mid-December, when local investors' dividend cheques from his alleged day-trading operations stopped. His wife is thought to have no idea where he is, but reportedly stated that he had not engaged in day trading for four months prior to his disappearance.

Meanwhile investigators examining Mr Madoff's alleged fraud have turned their attention to the Wall Street fund manager's UK business, as they try to pin down how much, if any, of his clients' money is left.

The Serious Fraud Office has begun a formal investigation into Madoff Securities International, based in London, where associates say he managed £100m of his family's money.

Mr Madoff transferred $160m to the London business in the autumn of 2007, as the credit crisis was beginning.