Iceland Mag

9 Reykjavik

Iceland Mag


Seven former Kaupthing bankers sentenced for market manipulation

By Staff

  • Guilty Hreiðar Már Sigurðsson (left) and Sigurður Einarsson, former heads of failed bank Kaupthing.

Seven former employees of failed bank Kaupthing received heavy jail sentences  in the Reykjavik District Court today.

The alleged market manipulation conspiracy case is the largest in a series of fraud prosecutions that have been brought to court since Iceland’s three major banks crashed in the autumn of 2008. More than fifty names were on the witness list. 

Earlier this year the Supreme Court of Iceland sentenced two of those seven bankers to jail for their role in another case of market manipulation of share prices in Kaupthing bank in 2008. The former CEO, Hreiðar Már Sigurðsson, received a five-and-a-half-year long sentence, which is the heaviest sentence for financial fraud in Iceland’s history, and former chairman, Sigurður Einarsson, received a four-year sentence.



Ingólfur Helgason

Although found guilty Hreiðar will not have to serve more time. But 18 months are added to Sigurður’s time in jail.

Ingólfur Helgason, the former CEO of the Kaupthing’s Iceland branch, received a four-and-a-half-year sentence today.

Magnús Guðmundsson, the former CEO of the bank’s Luxembourg branch, was found not guilty. He was sentenced to jail for four-and-a-half years by the Supreme Court of Iceland in the other case.

One lower ranked former Kaupthing staff member received jail time in the Reykjavik County Court today. Bjarki Diego got a two-and-a-half-year sentence, and four other former bankers got suspended sentences.

The defendants were accused of trying to artificially inflate share prices in the bank in 2008, by secretly using Kaupthing’s own funds to buy shares in the bank indirectly. When Kaupthing fell it was Iceland’s largest bank and had emerged as a serious international financial institution. This might be one of the largest alleged market conspiracies cases ever seen in Europe.

Read more: Former heads of failed bank Kaupthing receive the heaviest jail sentences for financial fraud in Iceland’s history
Read more: Three former Landsbanki executives sentenced to jail

According to a report made by The Special Investigation Commission of Alþingi(established by the Icelandic Parliament in December 2008) more than 40% of Kaupthing’s shares were held by the bank as loan collateral, when it fell in the autumn of 2008.

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