Updated from Monday, Dec. 15

The multibillion Ponzi scheme Wall Street money manager Bernard Madoff is accused of running has created quite a stir since regulators unveiled a complaint late last week detailing some $50 billion in losses.

According to a Securities and Exchange Commission complaint, filed in federal court in Manhattan, Madoff allegedly informed two senior employees that the investment advisory business was a fraud and had been insolvent for years. According to the complaint, Madoff told these employees that he was "finished," that "it's all just one big lie," and that it was "basically, a giant Ponzi scheme."( Photo gallery: Reported losers in Madoff scandal)

Madoff's Web site lists nearly 1,500 securities in which the firm maintains a market, including stocks such as Goldman Sachs ( GS - Get Report), Bank of America ( BAC - Get Report) and Johnson & Johnson ( JNJ - Get Report).

TheStreet.com has been on the story since it broke late on Dec. 11:

Doug Kass called it "the single biggest financial story of the year. It is bigger than WorldCom, bigger than Ivan Boesky and bigger than Tyco." In a separate item Friday, Kass said the Madoff scandal could have contributed to the overnight market selloff, which was attributed to the collapse of a bailout package for struggling automakers General Motors ( GM - Get Report), Ford ( F - Get Report) and Chrysler.

Jim Cramer called the alleged fraud "the highest profile hedge-fund scandal I may have ever seen."

"It's a gigantic green mass on the screen and its heading right for the psyche of this frail market," Cramer wrote.

Dan Freed said "the news could deal another blow to markets already reeling from a series of blowups that began with the unraveling of two Bear Stearns hedge funds last year."

Chip Hanlon, founder and president of Delta Global Advisors, told Rob Holmes he thought the markets would be able to shrug the scandal off. "I know the gut reaction is to say this will shake investor confidence and it's terrible for the economy, but it's likely a one-off," Hanlon said. "Everybody can see the number of assets at risk, and they might do some selling because this scheme could take the market down in the near term. But I think this occurs infrequently enough that people expect it's unlikely to happen to them. I hate to say it, but it's like a plane crash."

TheStreet.com asked readers who the scandal affected their confidence. Of the 3,540 people who answered the survey, 40.9% said the scandal "makes me more nervous than I ever was." Another 35.1% said that they "never trusted Wall Street" and never will.

On RealMoney.com Monday, Cramer told subscribers that the real impact of the Madoff scandal won't be felt until next year.

Glenn Hall wondered if the scandal puts to rest any doubt that bankers are " greedy idiots."

Kass on Monday reported that the impact of the scandal would be widespread. He said he received calls over the weekend from acquaintances, some of them crying, who had lost life savings. He also noted the impact on charities and the Florida real estate market. "It is not only the wealthiest that got duped, however, many smaller investors, who worked hard all their lives, invested their life savings with an alleged crook," he wrote.

Freed said many investors missed a red flag in that Madoff had been acting as his own prime broker. Even hedge funds a fraction of the size -- Madoff oversaw $17 billion, but has said to investigators he lost $50 billion -- use one or more prime brokers at large banks or securities firms such as Goldman or Morgan Stanley ( MS - Get Report), Freed wrote.

Christopher Grey on Tuesday wrote that it was not "a 'tragedy' that so many people with so much money and privilege were suckered by someone like Madoff. I think it is just a combination of laziness, stupidity and greed. That is not tragic to me. It is pathetic."

Check back for the latest breaking news on the situation.

This article was written by a staff member of TheStreet.com.