There's a new wrinkle in the Refco fiasco. Bloomberg News, citing individuals close to the case, reports that Refco held around $525 million in fixed-income securities for Austria's Bawag bank and offshore hedge fund Liquid Opportunity, but that those bonds didn't have numbers matching those of registered bonds. The accounts, according to Bloomberg News, resided in Refco's unit in Bermuda, out of the reach of the U.S. government. Bawag is the bank that bailed out former Refco chief Phillip Bennett last fall with a $420 million loan, and is now suing Refco. Refco attorney Anthony Clark of Skadden, Arps, Slate, Meagher & Flom, would not comment other than to tell Bloomberg News, "I'm not saying it did or didn't happen."

Meanwhile, U.S. Bankruptcy Judge Robert Drain of New York ruled that Refco Capital Markets should liquidate, and appointed a trustee to oversee it. That's good news for clients, because in liquidation, they would be first to get money back. The judge's ruling gives the parties 45 days to start working on a liquidation plan.