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Executives at collapsed Iceland bank jailed for fraud

Reuters

Two former executives at an Icelandic bank which collapsed in the 2008 financial meltdown were sentenced to jail on Friday for fraud which led to a 53 million euro loss, in the first major trial of Icelandic bankers linked to the crisis.

All three of the small North Atlantic island’s top banks collapsed in quick succession in October 2008 due to big debts incurred during a rapid overseas expansion.

Glitnir was the first to fall after the collapse of Lehman Brothers caused international credit markets to freeze up.

A Reykjavik court sentenced Glitnir’s former chief executive, Larus Welding, and former head of corporate finance, Gudmundur Hjaltason, each to nine months in jail, of which six months were suspended for two years. They had denied the charges.

Prosecutors said the two approved a loan to a company which owned shares in Glitnir so that the company could in turn repay a debt to Morgan Stanley.

The decision, taken outside the regular decision-making process, meant Glitnir was too exposed to the company and cost the bank at least 53.7 million euros (43 million pounds), the prosecution said.

The sentence was less than the jail terms of at least five years demanded by Iceland’s special prosecutor, who is looking into alleged wrongdoing connected to the crisis.

“We have a conviction, which is of course the main thing,” prosecutor Holmsteinn Sigurdsson told reporters outside the courtroom when asked whether he was disappointed with the length of the sentence.

The special prosecutor is also looking into alleged wrongdoing linked to the collapse of the other two former top banks, Landsbanki and Kaupthing.

(Reporting by Omar Valdimarsson; Writing by Patrick Lannin in Stockholm; Editing by Pravin Char)

http://uk.reuters.com/article/2012/12/28/uk-iceland-crisis-idUKBRE8BR0EW20121228

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4 Responses to Executives at collapsed Iceland bank jailed for fraud

  1. Patrick Conway says:

    When one sees the sentencing, one has to wonder if this is for real or just for show to placate the masses and delay retaliation. There appears to be no place on earth willing to defy the bankers and the “City of London”. I have a feeling that bombers would have to target that special square mile.

  2. Enbe says:

    The Icelanders have taken one correct step. Now they need to realize that their judicial system needs to purged and remediated.

  3. NC says:

    Why can’t we be like the people of Iceland? They have brains and balls. Our people have no brains and no balls. They have people. We have sheeple. Do you see what I’m getting at? If things don’t start happening by the year 2020, I think I will consider moving to Iceland in some way. By 2020, I’m either going to go on a bloody rampage or I am going to move to Iceland and live peacefully in a humane way. If the world is still existing by then.

  4. # 1 NWO Hatr says:

    Seed vaults.

    GMO-free seed vaults.

    Perfect location.

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