Austrian bank in Refco settlement

Former Refco CEO Phillip Bennett is facing fraud charges in the US

One of Austria's biggest banks, Bank Fuer Arbeit und Wirtschaft (Bawag), is to pay $675m (£361m) to settle claims it helped a US brokerage commit fraud.

US authorities said the large payment was related to its dealings with the now defunct brokerage Refco.

As part of the deal Bawag admitted helping hide bad debt at Refco.

The US Attorney's office said from 2000 to 2005 Bawag yearly lent Refco ex-CEO Phillip Bennett $250-$300m, cash used to disguise bad customer debt it says.

Arrest warrants

From the Austrian settlement, unsecured creditors will be allocated about $500m.

Investors who bought Refco shares last year or had bought the company's bonds will get $100m from the settlement.

In March authorities in Austria issued an arrest warrant for Mr Bennett, who was indicted in the US last November for fraud - charges he denies.

The move came after Austrian prosecutors began an inquiry into fraud and related charges surrounding Mr Bennett.

At the time a warrant was also put out for the son of the former head of Bawag, Wolfgang Floettl Jnr.

He is alleged to have carried out speculative dealings, sparking Bawag losses of almost 1bn euros (£690m).