In forex trading we would never make a mistake and cause small and large losses in Demo or Real account. We introduce to you about two people who cause harm to a large bank in Austria that is the Bank für Arbeit und Wirtschaft AG (BAWAG). Losses due to foreign exchange transactions. Both men are Flöttl Wolfgang and Helmut Elsner. The total losses caused by them are for 1.4 billion euros (equivalent to $ 1.97 billion today - 2008). Event is known as the Refco scandal.BAWAG Profile
Bank für Arbeit und Wirtschaft is a bank in Vienna, Austria with its mission as serving the Commercial banks banking, Investment banking, Private banking and asset protection clients. Established in 1922 and on October 1, 2005, the bank's merger with investment institutions Österreichische Postsparkasse (PSK) and the name was changed to "Bank für Arbeit und Wirtschaft und Österreichische Postsparkasse AG", abbreviated as BAWAG PSK Actually the majority of shares Österreichische Postsparkasse (PSK) has been dominated by BAWAG. But not until the year 2005 the merger occurs.
BAWAG nearly bankrupt Refco scandal in 2005 with the receivables not collectible for 425 million, demand deposits and bonds bilyet In total for a 1.4 billion Euro for Forex transactions. The person is a party related to the internal Flöttl named Wolfgang and Helmut Elsner.
Unable to survive because of the large losses that the U.S. investment firm Cerberus Capital Management bought BAWAG with funds of 3.2 billion pounds.
Refco Profile
Refco is a futures brokerage firm that trades including forex, index and commodity. Founded in 1969 under the name "Ray E. Friedman and Co.." or shortened by Refco. In 2005 the volume of transactions Refco reached $ 4 billion in the year 2005 with the number of customers reached 200 thousand people. Refco also included in the list of brokers on the Chicago Mercantile Exchange
Scandal Wolfgang Flotti & Helmut Elsner
Financial scandals that began on October 10, 2005 where the CEO (Chief Executive Officer) and concurrently the leader of Refco, Phillip R. Bennett hid the $ 430 million without the knowledge of investors and auditors. In April of 2006 files Bennett crimes known customers from Bawag PSK Group (a member of the investment firm / hedge fund Liberty Corner Capital Strategy, which borrow money Refco). Can be concluded Bennett borrow money to BAWAG. Bennett handed the money to the $ 430 million investment company Ross Capital.
Wolfgang Flottl was a trader in the Capital mentradingkan Ross Bennett funds of $ 430 million. Before the public knows who carried out embezzlement Bennett, so Bennett did loan money again for 350 million euros to BAWAG to close the $ 430 million. BAWAG internal parties who approved the loan ceiling is Helmut Elsner Bennett. Problems began when the investment made by Wolfgang losers. This is complicated processes occur. Finally, Central Bank of Austria and the Financial Market Authority bodies know that something is wrong and investigate BAWAG's involvement with Refco.
Bennett finally arrested and ordered to pay all his debts. Overall Bennett, Wolgang, and General Director of BAWAG Helmut Elsner was arrested the authorities.
Because the act of speculation and fraud that hurt the bank BAWAG (largest bank in Austria 4), in the end (derived from AustriaTimes) Helmut Elsner and Wolfgang Flotti each sued for 9.5 years and 2.5 years in prison.
BAWAG bank scandal eventually brought a total of 9 people charged into custody. The huge losses experienced by BAWAG result of this company sold to Cerberus Capital Management LP in 2007.
Here are the mistakes made by Elsner causing heavy jail sentence:
1. Helmut Elsner banks lend funds to the U.S. futures are at Refco Inc. when it was in the bankruptcy.
2. Helmut Elsner was also accused guilty of lending money to Wolfgang Flotti because borrowing is based on risk and without liability. More than that, Elsner did not report the amount of borrowed funds after the funds had been loaned for speculation measures. He is also guilty of having received bonuses and retirement benefits that should not be accepted if from the beginning he had caused considerable losses.
As for Wolfgang Flotti not described in detail the action he did. However, as a hedge fund manager, he was prosecuted for actions that do not use the funds properly, fraud, and fraud in the reporting.
However, despite all that, according to AustrianTimes, Flotti Wolfgang Helmut Elsner and still have the right to request review of their case.
