Ex-Refco Boss Says 'Not Guilty'

Former Refco boss Phillip Bennett pleaded not guilty Friday to eight counts of fraud. Although Bennett is currently out on $50m bail, US prosecutors tried to keep him locked up on the basis that he was a flight risk. Bennett is the co-owner of an $18m jet. But the judge was having none of it, and said that airport authorities had been informed to alert the FBI if Bennett attempted to use the plane.

Austrian bank Bawag P.S.K Group has sued Refco Inc and Bennett, and seeks over $420m it what the bank claims are fraudulent loans. Bagwag says that Bennett borrowed the money, which eventually went into Refco's coffers, but that the funds would never have been lent if it had been aware that there was an in-house probe about monies Bennett owed the firm. 

And finally, Johann Zwettler, Bawag's CEO, has said that he will stand down at the end of the year. Although the bank's supervisory board said that it found nothing wrong with Bennett's loan-approval process, it did urge tighter controls on large corporate loans in future. Zwettler, 64, wants to do the honourable thing and says that wanted to take 'political responsibility' for the matter. He has, therefore, fallen on his sword.

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