Sigrún Davíðsdóttir's Icelog

Does punishment scare alleged white-collar criminals? That seems to be the case in Iceland

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The effect of punishment is a hotly debated topic in criminology. The fact that two Icelandic bankers were sentenced to 4 1/2 years in prison for breach of fiduciary duty in the so-called Byr case seems to have shaken others in a similar situation. In an interview with Ruv tonight, the head of the Office of the Special Prosecutor Olafur Hauksson said that the OSP clearly senses that the Byr sentence has had an effect.

“The judgment gives a clear indication how the courts are likely to view similar cases. Also, the judgment has in some ways clarified things for those we are questioning, which means that the testimonies are now more clear than earlier,” Hauksson said. Those questioned are more willing to tell the whole story than earlier, which means that witness statements are better.

Hauksson says that the heavy sentences have spelled out the gravity of these cases. Many other cases under investigation regard breach of fiduciary duty where the sums at stake are not only ISK1bn, like in the Byr case but amount to several billions or even tens of billions. The maximum punishment for breach of fiduciary duty is six years, which means that the Supreme Court judges who ruled on the Byr case must have seen this activity as a serious crime.

Again, the question is why so little seems to be done in other European countries to prosecute bankers. Breach of fiduciary duty is a crime in most if not all Western countries, it is a fairly clear-cut activity – and yes, at least in Iceland it’s actually a serious crime.

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Written by Sigrún Davídsdóttir

August 7th, 2012 at 7:51 pm

Posted in Iceland

One Response to 'Does punishment scare alleged white-collar criminals? That seems to be the case in Iceland'

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  1. The UK should be particularly ashamed of allowing the banks to walk all over the tax-payer and make utter fools of the government who are but puppets in the hands of the selfish and greedy bankers.

    Britain certainly doesn’t have a Gold Medal for tackling the banking scandals!
    On the contrary, Britain and Luxembourg seem to be the biggest culprits of negligence and outright cover-up.
    The world notices just as the world is noticing that Iceland is the only country in the world to have taken the bull by the horns and made determined efforts to bring the delinquent Banksters to account and give jail sentences.

    Other nations should follow their example.

    George Ward

    8 Aug 12 at 3:51 pm

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