Refco Lender Had Its Own Dark Places

The resemblances grew Friday between Refco(RFXCQ Quote), the fallen New York commodities brokerage, and its Austrian patron, the Bank Fur Arbeit und Wirtschaft, or Bawag.

Both were involved in hiding hundreds of millions of dollars in bad debts and losses, for one thing.

Bawag officials said Friday that by the end of 2000, the bank had run up $1.2 billion in losses, much of them stemming from a series of bad investments made by a hedge fund run by the son of a former CEO. Vienna-based Bawag shifted the losses to six obscure Anguilla-based companies and several brokerage accounts at Refco, until it could eventually write off all its bad debts by 2005. ...