Bawag: Austria's Master Plumber

Michael Bachner, an attorney for Spinner, declined to comment on the investigation. Michael Sommer, the lawyer for Drillman, did not return several phone calls. Both men are currently brokers with Pond Equities, a small firm in New York.

Amro is now largely inactive. It hasn't appeared in a PIPEs deal for several years. However, for a time, Amro was investing in many of the same deals as the Bawag affiliates. In at least one PIPE, a financing for Bravo Foods International(BRVO.OB Quote), Amro and Austinvest are described as having a "common investment representative.'' That investment representative was Rhino Advisors.

There's nothing to indicate that Drillman and Spinner ever engaged in any improper trading with regard to the Bawag-related hedge funds. Still, there is ample evidence the brokers were willing to go to great lengths to please their customers.

In January 2002, Drillman and Spinner wrote a "letter of reference'' on Refco letterhead for Alpha Capital. The letter, which is part of the court record in the Mooney bankruptcy, was designed to persuade officials at the aircraft company of Alpha Capital's good character.

"We suggest that you should feel comfortable in your dealings with Alpha Capital with respect to the integrity of those who speak on its behalf as well as with respect to its ability to perform on its financial obligations,'' the brokers wrote.

In the letter, the brokers also noted that Alpha Capital was "jointly owned by the Bank fur Arbeit und Wirtschaft'' and "a group of well regarded high net worth individuals.'' They added that Alpha Capital was formed by individuals "involved in similar investment vehicles,'' and that Refco had worked on transactions for these individuals totaling more than $100 million.

Of course, writing a glowing letter for a customer is a far cry from what regulators suspect Drillman and Spinner did for Amro, according to sources and investigation documents. Regulators are looking into allegations that the brokers helped arrange a series of illegal short-sales for Amro after the hedge fund invested in a $3 million PIPE deal by Sedona(SDNA.OB Quote), a small Pennsylvania software company.