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

RT | November 20, 2014

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.

READ MORE: Icelandic ‘banksters’ get jail time over Kaupthing fraud

November 20, 2014 Posted by | Corruption, Deception | , , , , | Leave a comment

Four Kaupthing Banking Executives Sentenced To Prison

By Paul Fontaine – Grapevine – December 12, 2013

In a landmark ruling, Reykjavík District Court sentenced four former executives of Kaupthing Bank to between 3 and 5 1/2 years in prison for financial crimes dating back to 2008.

Vísir reports that former Kaupthing director Hreiðar Már Sigurðsson received the heaviest sentence: five and a half years, minus time already spent in custody. He was also sentenced to pay 33.4 million ISK in legal fees.

Former Kaupthing chairperson – and former Interpol fugitive – Sigurður Einarsson was sentenced to five years, and a total of 14.3 million ISK in legal fees.

Investor Ólafur Ólafsson was sentenced to three and a half years, and 20.6 million ISK in legal fees.

Former director of the Luxemborg branch of Kaupthing Magnús Guðmundsson was sentenced to three years in prison.

In the court’s opinion, the four conspired to conceal the fact that one of the investors in Kaupthing, Mohammad Bin Khalifa Al-Thani, owned his 5.01% stake in the bank thanks to money lent to him by the bank itself.

Investigations into the four go back to the Icelandic bank crash of autumn 2008. In the wake of a report on the contributing causes of the crash from the Special Investigative Commission, the Special Prosecutor’s Office was created. The office targeted many top bank officials from Glitnir and Kaupthing.

Eva Joly, who at one point served as an assistant to the Special Prosecutor, told the Grapevine last year that Iceland should “be proud you invested in these investigations”, while cautioning to have patience – investigations were three years along at the time.

The four are expected to appeal the decision to the Supreme Court. All of their prison sentences are non-probationary.

December 14, 2013 Posted by | Corruption, Economics | , , , | Leave a comment

Iceland thumbs nose at international opposition to advance $1.2 billion debt relief plan

RT | December 1, 2013

Iceland’s government has announced that it will be writing off up to 24,000 euros ($32,600) of every household’s mortgage, fulfilling its election promise, despite overwhelming criticism from international financial institutions.

The measure was introduced by the country’s prime minister, Sigmundur David Gunnlaugsson, the leader of the Progressive Party which won the late-April elections on a promise of household debt relief.

According to the government’s website the household debt will be reduced by 13 percent on average.

Citizens of Iceland have been suffering from debt since the 2008 financial crisis, which led to high borrowing costs after the collapse of the krona against other currencies.

“Currently, household debt is equivalent to 108 percent of GDP, which is high by international comparison,” highlighted a government statement, according to AFP. “The action will boost household disposable income and encourage savings.”

The government said that the debt relief will begin by mid-2014 and according to estimates the measure is set to cost $1.2 billion in total. It will be spread out over four years.

The financing plan for the program has not yet been laid out. However, Gunnlaugsson has promised that public finances will not be put at risk. It was initially proposed that the foreign creditors of Icelandic banks would pay for the measure.

International organizations have confronted the idea with criticism. The International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD) have advised against it, citing economic concerns.

Iceland has “little fiscal space for additional household debt relief” according to the IMF, while the OECD stated that Iceland should limit its mortgage relief to low-income households.

In the meantime, ratings service, Standard & Poor’s, cut back on its outlook for Iceland’s long-term credit rating to negative from stable, stating that the economic measure could affect the confidence of foreign investors if it ends up being paid for by the existing creditors of Icelandic banks.

December 1, 2013 Posted by | Economics, Timeless or most popular | , , , , , | Leave a comment

Iceland’s recovery continues, declared ‘impressive’

Ice News | August 22, 2012

Experts continue to praise Iceland’s recovery success after the country’s bank bailouts of 2008.

Unlike the US and several countries in the eurozone, Iceland allowed its banking system to fail in the global economic downturn and put the burden on the industry’s creditors rather than taxpayers.

In the following years, the Icelandic government made drastic cuts that reduced the fiscal deficit from 14 percent of GDP to just two percent. At the same time, unemployment in Iceland has shrunk to less than five percent, while analysts predict the North Atlantic economy to grow some 2.8 percent by the end of 2012, according to recent reports.

The rebound continues to wow officials, including International Monetary Fund chief Christine Lagarde, who recently referred to the Icelandic recovery as “impressive”. And experts continue to reiterate that European officials should look to Iceland for lessons regarding austerity measures and similar issues.

The Financial Times outlined a number of important points for countries in the eurozone to consider in an article published on Monday. These include Iceland’s tactic of pursing “politics of social and economic inclusion”. This includes heavier taxes on the higher brackets while cutting welfare schemes less than other areas of the budget to retain the purchasing power of lower income groups.

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August 23, 2012 Posted by | Economics | , , , , | Leave a comment

Iceland to bring former premier to trial over financial crisis

Press TV – March 5, 2012

Iceland’s former Prime Minister Geir Haarde is to go on trial over charges of leading the country, once proud of its oversized banking sector, to bankruptcy in 2008.

Haarde is accused of negligence in failing to prevent financial collapse in the small island country. The 60-year-old former premier, however, rejects the accusations, calling them “political persecution.”

The trial is set to begin on Monday at 0900 GMT and to last 10 days, until March 15, but it is unclear how quickly a verdict can be expected after that.

He is one of four politicians blamed in a 2010 report for their roles in banking sector collapse when the country’s all major banks failed in a matter of weeks.

Some argue that Iceland’s economic crisis was the result of global crisis and the government could not have predicted or prevented it.

But parliament voted in September 2010 that he was the only one who should be tried on charges related to the crisis.

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March 5, 2012 Posted by | Corruption, Deception, Timeless or most popular | , | Leave a comment

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