Accounting giant KPMG UK has become the latest firm to be struck with a lawsuit by the fallout of Bernard Madoff's $65bn (£39bn) Ponzi scheme as auditor of its London-based operation. The complaint, filed in the New York Supreme Court, has been brought against KPMG by law firm Cotchett, Pitre & McCarthy on behalf of investor Jay Wexler, a New York citizen who it says invested hundreds of thousands of dollars in Rye Select Broad Market Prime Fund, a feeder fund of Bernard Madoff Investment Securities. The law firm has alleged in its complaint that 'powerhouse accounting firm KPMG LLP and their international counterparts, KPMG UK and KPMG International were primary players responsible for the fraud'. It is alleged that Madoff's London office played a key role in the Ponzi scheme, that Madoff used the office as the vehicle that made it appear as if securities were being traded. It was these 'smoke and mirrors' that the complaint alleges 'should have been discovered by KPMG UK' as its auditor. 'Instead', it continued, 'KPMG UK never raised any red flags that investors' money was used by Madoff as his personal piggy bank'. A spokesman for KPMG said: 'KPMG LLP (UK) ("KPMG") has been named as a defendant in a complaint brought by a US-based investor in funds operated by Bernard Madoff. 'KPMG considers the allegations in the complaint to be wholly without merit and will defend them vigorously. 'The complaint cites KPMG in its capacity as statutory auditor of Madoff Securities International Limited ("MSIL"), a London-based company directly owned by the Madoff family. 'KPMG acted in this capacity for several years and issued unqualified audit opinions on MSIL's financial statements. 'We are not aware of any suggestion that the financial statements of MSIL contain errors.'