Washington ? Republican and Democratic House members said Monday that the alleged $50 billion fraud involving Wall Street figure Bernard Madoff reflects deep, systemic problems at the Securities and Exchange Commission.

Inspector General H. David Kotz said he is so concerned about the SEC’s failure to uncover Madoff’s alleged Ponzi scheme that the IG is expanding the inquiry called for last month by SEC Chairman Christopher Cox. Cox had pushed the blame squarely onto the SEC’s career staff for the failure to detect what Madoff was doing.

Kotz said he will examine the operations of the SEC’s enforcement and inspection divisions and will make recommendations for changes, steps beyond what Cox had called for.

In New York, a prosecutor on Monday asked that Madoff be jailed pending trial, saying the disgraced financier violated an agreement with the court by mailing watches, jewelry, cuff-links and mittens worth more than $1 million to relatives and friends.

Madoff’s lawyer, Ira Sorkin, said his client did not violate a court-imposed asset freeze by mailing heirlooms through the post office to his brother, a son and daughter-in-law and a New York couple vacationing in Florida. Besides watches and jewelry, other items included $25 cuff-links, pens and a $200 pair of mittens.

The judge ordered both sides to submit written arguments this week and said he would rule later.

At the first congressional hearing on the scandal, Rep. Spencer Bachus, R-Ala., called for Congress to create a regulatory structure “for the 21st century.”

The House Financial Services Committee is trying to determine how, despite warnings back to at least 1999 to SEC staff members, Madoff continued to operate his alleged scheme.

“Clearly, our regulatory system … failed miserably and we must rebuild it now,” said Rep. Paul Kanjorski, D-Pa.

Rep. Paul Hodes, D-N.H., said the Madoff scandal is like “the cherry on a bad sundae.”

In the Senate, Banking Committee Chairman Chris Dodd, D-Conn., and Sen. Richard Shelby of Alabama, the panel’s senior Republican, announced that they have opened an investigation of the Madoff affair. They told Cox in a letter that they are reviewing the SEC’s oversight of Madoff’s firm and requested relevant documents from the agency.