VIENNA, Austria (AP) ? Vienna?s public prosecutor issued arrest warrants yesterday for Phillip Bennett, the former head of the troubled New York commodities brokerage Refco Inc., and the son of a former president of the bank that lent Bennett hundreds of millions of dollars.

The move came one day after the prosecutor?s office announced it was investigating Bennett and Bermuda resident Wolfgang Flottl Jr. on fraud and other charges. Flottl Jr. is implicated in highly speculative dealings while his father was head of the Bank Fuer Arbeit und Wirtschaft AG that led to bank losses of just under 1 billion euros ($1.2 billion).

Although neither man is in Austria, the Austria Press Agency quoted prosecutor?s spokesman Walter Geyer as saying the warrants were issued on formal grounds when there is concern that suspects might flee or conspire to hide wrongdoing.

The legal moves came four days after the bank said it incurred losses of just under 1 billion euros ($1.2 billion) through the financing of investment companies mainly engaged in interest rate and currency transactions in the Caribbean. Flottl Jr. is implicated in those transactions.

While officials at the bank, which is known by its acronym BAWAG, say the bank remains financially sound, the affair has further tarnished its image.

It has sued Refco and Bennett for fraud, unjust enrichment and deception in an attempt to recover 350 million euros ($410 million) in loans to the troubled New York commodities broker.

Refco filed for bankruptcy on October 17, just eight days after it announced a shortfall in its books.

Bennett took responsibility for the shortfall, taking out a loan to pay it back just before the company placed him on indefinite leave. BAWAG lent Bennett most of the cash to repay the money and is listed as the company?s largest unsecured creditor.

The prosecutor?s office had announced on Monday that former BAWAG presidents Helmut Elsner and Johann Zwettler were also being investigated but did not elaborate.

Also on Monday, the bank?s supervisory board announced the resignations, effective at the beginning of April, of four of its eight members linked to BAWAG?s past financial misfortunes. Earlier in the day, Fritz Verzetnitsch, the head of the Austrian Labor Federation, which owns the bank, also stepped down for his role in covering up the bank?s Caribbean losses and agreeing to underwrite them with union funds.

In 2000, his federation posted a guarantee for the losses, enabling the bank to write them off gradually over time.

Without this guarantee the bank would have been at risk of insolvency, the company said.

While Verzetnitsch did not play a direct role in the deal, he was told about it, leading to calls for his resignation.

Critics said the secret arrangement was morally flawed because it put money paid by union members into the fund at risk, ultimately making them responsible for bailing out the bank.

Verzetnitsch also stepped down as a Social Democratic member of parliament.