WRAPUP 1-Madoff tries to stay out of jail as probe widens

* Massachusetts regulator issues subpoenas

* Court hearing on bail postponed until Wednesday

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

By Svea Herbst-Bayliss and Martha Graybow

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.