Bawag Quits PIPEs Market

Austrian lender Bank fur Arbeit und Wirtschaft, in a surprise move, announced Friday that it is no longer financing customers in the market for PIPEs, or private investments in public equity.

Austria's fourth-largest bank announced its decision to withdraw from the $18 billion-a-year U.S. PIPEs market in a press release posted on its Web site. The bank's tersely worded statement said its managing board "decided in February 2006 to discontinue the financing of customer activities in the PIPE issuance market.''

In the U.S., Bawag, as the bank is commonly called, is best-known for its ties to Refco(RFXCQ Quote), the bankrupt and scandal-tarred commodities and derivatives brokerage. Bawag was a one-time minority owner of Refco and made a $410 million loan to the CEO, Phillip Bennett, just hours before the brokerage disclosed that Bennett had been hiding hundreds of millions of dollars in customer trading losses for years. ...