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Floettl, Bankers Acquitted in Vienna Over Austrian Bawag Losses

Dec. 18 (Bloomberg) -- Fund manager Wolfgang Floettl and five others who helped run up as much as 1.7 billion euros ($2.3 billion) of losses at Bawag PSK Bank AG were acquitted of misusing funds after a retrial in Austria’s biggest ever white-collar crime case.

Floettl, 57, the four Bawag managers accused along with him and one of the lender’s auditors, were found not guilty by Judge Christian Boehm, Vienna criminal court spokeswoman Christina Salzborn said in an e-mailed statement. The court overturned an earlier verdict after Austria’s highest court ordered the retrial in 2010.

“The court’s main reason for the acquittal was the lack of evidence for intent and purpose” of the accused, Salzborn said. Floettl, who is married to a granddaughter of former U.S. President Dwight Eisenhower, had been found guilty of misuse of funds in the first trial against the group in 2008.

Floettl had run up the losses for Bawag, which was then owned by Austria’s trade union federation, from the late 1990s mostly with wrong-way bets on the Japanese yen. The losses weren’t discovered until U.S. futures broker Refco Inc. collapsed into bankruptcy in 2006. Their discovery eventually forced the union to sell Bawag to private-equity firm Cerberus Capital Management LP in 2007.

Former Bawag Chief Executive Officer Helmut Elsner, 77, was already sentenced to 10 years in jail, the toughest possible punishment for misuse of funds and other crimes for which he was convicted.

To contact the reporter on this story: Boris Groendahl in Vienna at

To contact the editor responsible for this story: Frank Connelly at

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