Financial watchdogs have launched an inquiry into Austrian bank BAWAG's 350m euro ($418m; £237m) loan to the ex-boss of crisis-hit US finance firm Refco.
Refco's bankruptcy would be one of the biggest in US business history
Austrian regulators are investigating if BAWAG followed proper rules when it granted the loan to Phillip Bennett.
Refco has been struggling since its former chief executive was charged with fraud and concealing a $430m loan ahead of a stock market flotation.
The company filed for bankruptcy protection from creditors on Tuesday.
Reputation in tatters
The supervisory board of BAWAG, which is Austria's fourth-biggest bank, said on Thursday that no rules had been broken when the loan was paid to Mr Bennett.
However, it criticised BAWAG's management for failing to submit the loan to the bank's credit committee.
Supervisory board chairman Guenter Weninger said Mr Bennett had asked BAWAG for the loan earlier in October.
The money was paid to Mr Bennett shortly before he was suspended from his post.
Until its problems, Refco was a market maker for commodities and financial futures, and one of the biggest of the companies providing liquidity to ensure that traders would be able to buy and sell contracts.
But its reputation was left in tatters - and its share price tumbled - after charges were levelled against its former boss.
Mr Bennett is accused of hiding the fact that Refco Capital Markets - an unregulated subsidiary he controlled - owed $430m to its parent company through a series of undisclosed transactions.
He faces up to 20 years in jail if found guilty of securities fraud.
Earlier this week, Refco said it had agreed to sell its futures brokerage business to buy-out specialist JC Flowers & Co.
Refco's bankruptcy would be one of the biggest in US business history.