Iceland’s Supreme Court have sentenced four bank bosses from Kaupthing bank to serve jail time.
In a refreshing move that other countries could make note of, the court ordered the bankers to serve between four and five and a half years in prison.
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Pictured above the bankers are; Sigurdur Einarsson, former chairman of the board, Hreidar Mar Sigurdsson, the former chief executive, Magnus Gudmundsson, the former chief executive of the Luxembourg branch and Olafur Olafsson, one of the majority owners. They have been accused of hiding the fact that Qatari investor, Sheikh Mohammed Bin Khalifa Bin Hamad al-Thani, bought a stake in Kaupthing – but had actually borrowed the money illegally from the bank itself.
Al-Thani’s purchase, a 5,1% share in the bank, was announced only a few weeks before the collapse. The investor’s purchase was seen as a confidence boost for the bank while rumors circulated about the bank having troubles.
The Supreme court confirmed the five and a half year verdict Hreidar Mar Sigurdsson, the former chief executive, received in the district court. Sigurdur Einarsson, former chairman of the board, was sentenced to four years in jail.
The Supreme Court gave Olafur Olafsson, one of the majority owners four and a half years and Magnus Gudmundsson, the former chief executive of the Luxembourg branch, four and a half years. They received a three and a half year and three year sentence respectively in the district court.
These are the heaviest sentences for financial fraud in Iceland’s history. The four will have to pay their own legal costs for the case which amount to 82 million kronur or approximately 670 thousand US dollars.
Sigurdsson and Einarsson are facing another and bigger case against Kaupthing in which it is accused of market manipulation. It is due to court on April 21st and is expected to take four weeks. In all nine former employers of the Kaupthing bank are facing prison time if convicted.