* Massachusetts regulator issues subpoenas

* Court hearing on bail postponed until Wednesday

* Ascot, Merkin, auditor sued (For more stories on Madoff, please see [nN14457948])

BOSTON/NEW YORK, Dec 16 (Reuters) - Bernard Madoff, the longtime Wall Street executive accused of cheating investors worldwide out of $50 billion, scrambled to find relatives or friends to guarantee his bond on Tuesday and keep him of jail.

In Massachusetts, where the disgraced investor long cultivated a loyal group of wealthy individuals, the state’s chief securities regulator subpoenaed Bernard L. Madoff Investment Securities and Cohmad Securities Corp, a firm that marketed Madoff investment products.

The two firms must hand over the names and addresses of all local residents who let Madoff invest their money by Dec. 29. They must also deliver notes, emails, meeting agendas related to investments made since 2000, William Galvin, the state’s Secretary of the Commonwealth, said on Tuesday.

In New York, Madoff, who was arrested last week, has not yet fully met the conditions of his $10 million bond, according to court papers. He must find three co-signers to guarantee the bond.

If he fail to meet all the conditions, prosecutors could seek to have the 70-year old Madoff jailed, pending trial. A court hearing was set for Wednesday on bail matters after a Tuesday hearing was postponed.

Madoff, a former chairman of the Nasdaq Stock Market, faces up to 20 years in prison and a maximum fine of $5 million if convicted.

As more banks, hedge funds and wealthy investors around the world realize they fell victim to a man long respected on Wall Street for the steady returns that his funds produced year after year, their outrage has grown.

LAW SCHOOL LAWSUIT

“The names and sizes of those exposed to Bernard Madoff keep growing and most remarkable of all is the concentration of investments made by funds of hedge funds which promise their clients a diversified portfolio,” said Philippe Bonnefoy, chairman of the asset allocation committee at Cedar Partners, an investment adviser.

A fund of hedge funds is a basket of funds selected by the manager to spread around risk.

New York Law School sued Ascot Partners LP, an investment firm, general partner J. Ezra Merkin and auditor BDO Seidman LLP on Tuesday over investments with Madoff. (Please see [ID:nN16279868]).

Massachusetts Mutual Life Insurance Co acknowledged its exposure to Madoff after a hedge fund unit invested heavily with him. Tremont Holdings Inc’s Rye Investment Management unit lost roughly $3 billion, nearly all of the money the unit managed, people familiar with the matter said.

Madoff is also closely tied to Carl Shapiro, a 95-year-old Boston philanthropist who bestowed much of his fortune to the city’s Beth Israel Deaconess Medical Center and the city’s Museum of Fine Arts.

Austria’s Bank Medici, a closely held bank serving wealthy clients, also said it was affected by Madoff’s scheme, but declined to give a total for its losses. [ID:nLG96997]

At the same time, prosecutors and regulators asked people who suspect that they lost money to Madoff to come forward.

The U.S. Attorney’s Office in New York, which is prosecuting the Madoff case, set up a website for investors who may have been victimized. It also posted an FBI hotline number, 212-384-2359, for investors to call.

SIFTING THROUGH THE PAPERS

Investors were requested to gather any documents related to their Madoff investments and to check the website and others set up by the U.S. Securities and Exchange Commission, the trustee of Madoff’s brokerage business and the court-appointed receiver in the case.

Lawyers worried that many of the financial statements that Madoff’s firm mailed to clients were not accurate, and that it will take months to sift through the papers.

“This is a mess and it will take much longer than normal,” said Douglas Hirsch, a partner at law firm Sadis & Goldberg, describing the work facing the trustee appointed to oversee the liquidation of Madoff’s firm.

The Securities Investor Protection Corp, a nonprofit organization that provides limited insurance on investors’ accounts, was named as trustee on Monday.

Madoff, who was well-known on the charity ball circuit and long supported cancer and diabetes research, also gave about $238,200 to political candidates, parties and committees, mostly Democratic, since 1991, according to the Center for Responsive Politics, which tracks political giving.

U.S. Senator Charles Schumer, a New York Democrat, received $12,000, while U.S. Rep. Edward Markey, a Massachusetts Democrat, received $10,000 over the years, the Center found.

The impact of Madoff’s alleged fraud may be felt most severely among hedge funds. For example, the Credit Suisse/Tremont Hedge Fund Index fell 4.15 percent in November, far more than the preliminary 0.7 percent decline reported last week.

Standard & Poor’s said it will review public sector entities, such as universities, that invested with Madoff, to see whether their ratings should be cut as a result of their likely investment losses. [ID:nN16272865] (Additional reporting by Joan Gralla and Grant McCool in New York, Kevin Drawbaugh in Washington and Boris Groendahl and Eva Kmarek in Vienna; editing by Jeffrey Benkoe)