Icelandic bankers jailed over stock price boosting

The former head of Icelandic bank Landsbanki, the country's second-largest before the collapse of the financial sector in 2008, was handed a 12-month sentence this morning over his role in the crisis.

A Reykjavik court sentenced Sigurjon Arnason, 48, to 12 months in prison with three months served over artificially boosted stock prices.

Two former executives from the bank were sentenced to nine months with three months served over the same allegations.

Landsbanki executives were accused of manipulating the bank's share price by lending funds to investors on condition they buy shares.

Iceland's banks had gone on an international buying binge in the early 2000s fuelled by cheap foreign loans.

But the global financial crisis in 2008 froze credit markets and Iceland's banks quickly collapsed, plunging the island's economy into a deep recession.

Iceland's then prime minister Geir Haarde has been found guilty of one minor charge but cleared of serious accusations relating to his handling of the banking collapse.

The heaviest sentences have been handed out to three former directors of what was once Iceland's biggest bank, Kaupthing.

They were sentenced to between three-and-a-half and five-and-a-half years in prison in December 2013.

A cash injection to Kaupthing from Qatari investor Mohammed bin Khalifa al-Thani in late September 2008, when Iceland's banking system was in free fall, was hailed by the management as a sign that the bank was on a sound financial footing.

Amid the financial crisis, Iceland was unable to save its three biggest banks, Kaupthing, Landsbanki and Glitnir, and allowed them to fail before dismantling them.

Mr Haarde, who was later named Iceland's ambassador in Washington, has argued that the government's choice to let the banks fail and repudiate their foreign debts saved the country from bankruptcy.

Readers Comments

Louise Brennan Because our Regulator and Dept of Finance , knew about it , OK'd it and told Anglo boys to get it done . When the State and their agents are complicit in a crime , it's hard for them to investigate it . Sure Judge Nolan didn't jail 2 anglo Bankers cause the Regulator " had led them into illegality "

James Nugent JAIL , I don't think so the man in charge of the Country's Finances Pat Neary, who " couldn't remember 83 times during the trial sailed off with a Golden Handshake of €640k on top of €140k annual pension. The man who Judge Nolan found had " led the Anglo Bankers into error and illegality " and it would " therefore be unjust to jail them ". The man who presided over the country's finances when the Country went bust. He is not being investigated ,never mind charged, his pension or handshake payment is not being sought, he is enjoying his retirement. Sean Quinn, much easier target, take all, ruin him and his companies aa ah go on ruin his children too, they are only culchies who should be taken down a peg or two !!!!! If your one of the Dublin Elite like Neary, who worked closely with ex Attorney General Paul Gallagher you will be fine.