Sigrún Davíðsdóttir's Icelog

Reykjavík County Court hands out severe prison sentences to four bankers

with 4 comments

“I’m just doing it for you guys,” Birkir Kristinsson was caught on tape saying to one of his fellow bankers at Glitnir. Kristinsson, the brother of Magnús Kristinsson – owner of fishing industries in the Vestman islands and a big borrower in the Icelandic banks – has been sentenced to five years in prison together with three Glitnir colleague two of whom also got the same prison sentence. The fourth was sentenced to four years in prison. Kristinsson has appealed and so will the three others most likely do.

This case is not one of the big ones involving major investors or bank managers and the numbers are not as high as in some of the other cases, most noticeably the al Thani case. It was however an important judgement because there are other similar cases snarling their way through courts.

Three Glitnir employees – Elmar Svavarsson, Jóhannes Baldursson and Magnús Arnar Arngrímsson (also accused in the Aurum case, acquitted in the Reykjavík District Court; case appealed to Supreme Court) – were indicted for loans to a fourth Glitnir employee, Birkir Kristinsson.

The loans, totaling ISK3.6bn, €23m, were issued between December 2007 and July 2008 to a company owned by Kristinsson, used to buy shares in Glitnir, thereby effectively creating a misleading share price. In addition, the three employees ignored the bank’s rules on lending. Later, the three made sure Glitnir i.a. bought back own shares at double the market price to insulate Kristinsson’s company from losses. Kristinsson was indicted for participating in the scheme.

Svavarsson and Baldursson, as well as Kristinsson were sentenced to five years in prison and Arngrímsson to four years. They were sentenced for market manipulation and breach of fiduciary duty. The four bankers are, with the exception of Birkir Kristinsson, not household names in Iceland. However, this is yet another banking-collapse case from the Office of the Special Prosecutor. Since there are other similar cases this verdict is indicative but none of these cases is over until ruled on by the Supreme Court.

The verdict, from June 22, is here, in Icelandic.

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Written by Sigrún Davídsdóttir

June 27th, 2014 at 1:19 pm

Posted in Iceland

4 Responses to 'Reykjavík County Court hands out severe prison sentences to four bankers'

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  1. Thanks again Sigrun for keeping us informed. The wheels of justice grind slowly. But at least, in Iceland, they are grinding …


    27 Jun 14 at 6:49 pm

  2. So true. – Since I’m fairly convinced that Icelandic bankers didn’t invent what they did I’m flabbergasted that not more is done in other countries to investigate the financial sector.

  3. I totally agree Sigrun, however one has only to look at events in Europe last week to see how vested interests forge what can only be described as the most ridiculous result in an election. Are these politicians totally blinkered or are they the victims of “pressure” from within? I am sad to say that I think that the same applies to financial justice in Europe as we are all well aware in our case regarding Landsbanki and Luxembourg and the equity release scam.

    Nina Foster

    29 Jun 14 at 8:48 am

  4. If these sentences are indicative of the sentences that may be handed out to Kaupthing managers (if they found guilty) then their time in jail will be less than the time it’s taken to return less than 100% of depositors’ funds from KSF Isle of of Man. Depositors don’t get paroled for good behavior either.

    Tony Cavanna

    29 Jun 14 at 12:19 pm

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