The largest fraud case in Iceland resulted in six bankers being sentenced to prison. The Kaupping bank market manipulation case is an example America and other countries should follow: bankers are not immune from the law and should be prosecuted for theft and fraud.
The Iceland Monitor reports that the biggest case of bank fraud in Iceland’s history resulted in top level executives being sentenced to prison for terms ranging between one and 4.5 years.
The bank fully financed ISK 65.2 million (roughly $563, 328) worth of share purchases with no other surety than the shares themselves. It was revealed in trial that the bank gave false and misleading information in order to hide its true financial condition, or lack there of, and profit from it.
The former director of Kaupþing, one of Iceland’s largest banks, was sentenced to four years and six months.
Its former credit manager, two years and six months. Its former director of proprietary trading, two years (suspended). Its proprietary trading executives, eighteen months (suspended).
The former chairman of the Kaupþing board was even sentenced to one year in prison.
Prior to this case, four Kaupþing executives were convicted for breach of trust and market abuse in the 2013 Al-Thani case. It was announced that a Qatari investor, Sheikh Mohammad bin Khalifa Al-Thani, bought a 5.01 percent share in the bank. But in fact it was not him but the Kaupþing bank itself that financed the majority of these shares.
As a result of fraud, breach of trust, and market abuse, Iceland’s Supreme Court sentenced four directors and owners of Kaupthing bank to 4.5-5.5 years in prison.
Hreiðar Már Sigurðsson, Kaupthing’s former chief executive, was sentenced to 5.5 years in prison and fined ISK 24.7 million ($213, 408); Sigurður Einarsson, former chairman at Kaupthing, was sentenced to four years and fined ISK 14 million ($120,960); and Magnús Guðmundsson, the former CEO of Kaupthing Luxembourg, and Ólafur Ólafsson, the second largest shareholder at the time, were both sentenced to 4.5 years and fined ISK 20 million ($172,800) and ISK 17.7 million ($152,928), respectively.