NEW YORK (AFP) - - US Wall Street baron Bernard Madoff was set tough new bail terms Wednesday including a curfew and wearing an electronic tag, as the US finance watchdog stepped up a probe into his alleged 50-billion dollar fraud.

Madoff avoided what would have been his first court appearance since his arrest last Thursday by agreeing to stringent new restrictions under his 10-million dollar bail.

These include home detention, a night-time curfew, electronic tagging and a requirement that his wife surrenders her passport, as well as pledge properties she owns in New York and Florida, District Court Magistrate Judge Gabriel Gorenstein said in court documents.

Madoff, 70, has already surrendered his own passport, and put up his seven-million dollar Manhattan apartment as surety against his bail.

But he had proved unable to meet one of the key requirements -- finding four people to back his bond.

The man once seen as a titan of Wall Street found only his wife and brother willing to sign up, according to court documents. This was despite having been granted an extra 24 hours to complete the requirement.

US authorities allege that over almost a decade Madoff used money from new investors to pay interest to other investors, in a fraud scheme known as a Ponzi pyramid.

Madoff has allegedly confessed to the scam, which he said involved some 50 billion dollars, and which collapsed after clients demanded their money back as the global financial crisis hit.

Late Tuesday, the chairman of the Securities and Exchange Commission (SEC) probing the affair said the initial findings were "deeply troubling.

"I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them," admitted SEC chairman Christopher Cox.

The commission is investigating how the financial regulatory body failed to detect the scheme, which duped large European banks as well as millionaire investors, for almost a decade.

Cox said the SEC "has learned that credible and specific allegations regarding Mr. Madoff's financial wrongdoing, going back to at least 1999, were repeatedly brought to the attention of SEC staff, but were never recommended to the commission for action."

The SEC probe is also investigating the relationship between Madoff's niece, Shana Madoff and a former SEC attorney Eric Swanson. The couple were married in 2007.

The probe will "include all staff contact and relationships with the Madoff family and firm, and their impact, if any, on decisions by staff regarding the firm," Cox said.

Before leaving the commission in 2006, Swanson worked for 10 years as a senior inspections and examination official. Swanson dated Shana Madoff for a year before marrying, his spokesman told The Wall Street Journal.

The SEC's failure to halt the fraud has been sharply criticized as banks and funds around the world, already licking wounds from the financial crisis, have reported huge losses from exposure to Madoff Investment Securities.

Spain's biggest bank Santander announced potential losses of more than three billion dollars (2.19 billion euros).

Private Austrian bank Medici said it had exposure of 2.1 billion dollars (1.5 billion euros) via two of its investment funds, but insisted the bank would pull through.

Dutch bank Fortis announced exposure of at least 1.2 billion dollars and Britain's HSBC at 1.0 billion dollars.

Italian bank UBI Banca estimated its exposure totalled slightly more than 84 million dollars (60 million euros). Other European banks have announced exposure of hundreds of millions of dollars.

Even the charitable Wunderkinder Foundation of Oscar-winning filmmaker Steven Spielberg fell victim to the mammoth fraud, with about 70 percent of the dividend income and interest for the foundation handled by Madoff's securities firm, according to The Wall Street Journal.