Refco Suit Targets Austrian Patron Bawag

Updated from 1:28 p.m. EDT

Refco's(RFXCQ Quote) creditors alleged in court Tuesday that Austria's Bank Fuer Arbeit und Wirtschaft was an active participant in the accounting fraud that led to the collapse of the once-dominant commodities brokerage.

In a lawsuit filed Tuesday in federal bankruptcy court in Manhattan, Refco's creditors alleged that Bawag wrongfully stripped $1.3 billion out of Refco before it collapsed last October. In conjunction with the filing of the lawsuit, Bankruptcy Judge Robert Drain signed an order freezing any assets Bawag may have in the U.S.

Questions have swirled from months about the relationship between Bawag, Austria's fourth-largest lender, and Refco, in which Bawag once owned a minority interest. Bawag became a lightning rod for lawyers after confirming that it lent former Refco CEO Phillip Bennett $410 million just as the accounting scandal was being divulged. ...