glitnir

Former head of Iceland’s Landsbanki jailed for role in 2008 crash

Sigurjon Arnason, the ex- CEO of Landsbanki, one of the three Icelandic banks that crashed and ruined the economy in 2008, has been sentenced to 12 month in prison for manipulating the bank’s share price and deceiving investors in the bank’s dying days.

  A court of Reykjavik found Arnason guilty, but nine months of his  term will be suspended  and served on  probation.

  Glitnir, Kaupthing and Landsbanki - the three largest Icelandic  banks – spectacularly crashed in the autumn of 2008 after gaining  assets equivalent to 10 times the size of Iceland’s economy as  they funded operations by local businessmen abroad. The former  chief executives of the other major banks have already received  jail sentences.

  Ivar Gudjonsson, Landsbanki’s former director of proprietary  trading, and Julius Heidarsson, a former broker, were sentenced  to 9 months of which 6 months will be suspended. They were  accused of manipulating the bank’s share price by lending funds  to investors provided they buy shares.

  All the accused pleaded not guilty.

"This sentence is a big surprise to me as I did nothing  wrong," Sigurjon Arnason told Reuters after the hearing. His  attorney said he would appeal the verdict, according to Icelandic  media.

  Unlike other western countries Iceland is actively targeting the  former top management of its banks as it investigates alleged  financial crimes committed in the lead up to the crisis of 2008.