Sigrún Davíðsdóttir's Icelog

Three Landsbanki managers sentenced to jail

with 5 comments

The Icelandic Supreme Court has sentenced (in Icelandic) three ex-managers of Landsbanki to jail sentences. Two of them – the bank’s CEO Sigurjón Árnason and director of corporate lending Elín Sigfússdóttir – had earlier been acquitted by Reykjavík District Court. The Supreme Court sentenced the two to respectively 3 1/2 years prison and 18 months prison. The third manager, Steinþór Gunnarsson director of proprietary trading had been been given a nine months suspended jail sentence, which the Supreme Court turned into nine months in prison.

The case was yet another example of bankers being convicted for breach of fiduciary duty, i.e. causing losses by fraudulent lending where laws and the banks own rules were broken, in addition to market manipulation. In this particular case over ISK5bn were lent to Ímon, a company with no assets except the Landsbanki shares bought for the fraudulent loans from Landsbanki on September 30 and October 3 2008, only days before the bank collapsed.

This case, called the Ímon case, was one of the first cases of suspicious lending to surface after the banks collapsed in early October 2008. The case became symptomatic for the three banks’  lending patterns where the banks lent money to asset-less companies to buy the banks’ own shares, with only the shares as collateral in the days, weeks and months before the banks failed, as share prices were collapsing. As so many of these loans the Ímon lending was later described in detail in the Special Investigation Committee report, published in April 2010.

With this sentence, top managers from both Landsbanki and Glitnir have been sentenced to prison. There are still on-going cases against Glitnir managers.

Updated 9 Oct., clarifying the loan and lending date.

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Written by Sigrún Davídsdóttir

October 8th, 2015 at 11:01 pm

Posted in Uncategorised

5 Responses to 'Three Landsbanki managers sentenced to jail'

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  1. Another triumph for Iceland: The top guys from Landsbanki, Glitnir and Kaupthing all in jail.
    In the UK, nothing; to the shame of the UK authorities and the City institutions who promoted and benefited so substantially from their criminal activities.
    We truly are one of the world’s top places to launder money and defraud clients and investors.

    Tony Shearer

    12 Oct 15 at 10:29 am

  2. Once again Tony, you are spot on!

    Last week,in another case in the Reykjavik District Court, two of the already-jailed Kaupthing managers were also found guilty of embezzlement of nearly 8 billion ISK (56 million euros) from Kaupthing in the Marple Holdings case. They were sentenced to 6 months & 18 months in prison and to pay damages to the Kaupthing estate. No doubt this will be appealed.


    13 Oct 15 at 3:41 pm

  3. anrigaut

    15 Oct 15 at 4:15 pm

  4. Even worse here in the States, Tony. Not only have the worst offenders not been punished, they still hold their posts and have received lucrative rewards, often from tax money.

    Knute Rife

    16 Oct 15 at 5:35 am

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