Iceland Magazine 14 Oct 15: 26 bankers already sentenced to a combined 74 years in prison

In two separate rulings last week, the Supreme Court of Iceland and the Reykjavík District Court sentenced three top managers of Landsbankinn and two top managers of Kaupþing, along with one prominent investor, to prison for crimes committed in the lead-up to the financial collapse of 2008. With these rulings the number of bankers and financiers who have been sentenced to prison for crimes relating to the financial collapse has reached 26, and a combined prison time of 74 years.

Former managers of Kaupþing top the list
Eleven former bankers have been sentenced to four and a half years or more in prison. The former top bosses of Kaupþing have received the longest sentences to date. Hreiðar Már Sigurðsson, the former CEO of failed bank Kaupþing and Magnús Guðmundsson, the CEO of Kaupþing Luxembourg, top the list, having been sentenced to a combined six years in prison for extensive market manipulation, embezzlement and breach of fiduciary duties. The maximum combined sentence for financial crimes according to Icelandic law is six years.

Courts can sentence people to longer prison terms than six years in cases where the crimes are systematic and repeated, and in cases where people make a living from engaging in financial crimes. Future cases against Magnús and Hreiðar Már will determine if the courts consider the two to have engaged in financial criminality of a scale which justifies expanding on the maximum sentences.

Market manipulation and embezzlement involving bankers and corporate Vikings
In addition to Hreiðar Már and Magnús eight other individuals with connections to Kaupþing have been sentenced to prison. Sigurður Einarsson, the Chairman of Kaupþing has been sentenced to a combined prison term of five years in two cases involving market manipulation in the lead up to the 2008 crisis, while the Reykjavík District court sentenced Ingólfur Helgason the CEO of Kaupþing’s domestic division to four and a half years and Bjarki Diego, managing director of the bank’s loan division to two years, both for market manipulation. Three others received suspended sentences.

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Supreme Court vs the Reykjavík District Court
To date the Supreme Court has ruled in eight cases. The court has handed down guilty verdicts in six of these cases, acquitted the defendants in one and referred one case back to the District Court of Reykjavík. Several cases are now making their way from the District Court to the Supreme Court. Judging by the previous rulings of the Supreme Court most observers believe the court will either uphold guilty verdicts and hand down more severe sentences or overturn acquittals.

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