Iceland Jails Bank Bosses

Execs inflated share price before financial collapse

By Rob Quinn,  Newser Staff

Posted Dec 13, 2013 12:15 AM CST

(Newser) – Iceland has done something highly unusual with some of the bank chiefs blamed for the country's 2008 financial collapse: put them on trial and sent them to prison. Four former Kaupthing Bank bosses have been sentenced to between three and five years for market abuses relating to a deal where a Qatari sheikh bought a confidence-boosting stake in the bank with money that had been provided by the bank itself, the BBC reports.

Prosecutors said the loans, made soon before Kaupthing collapsed under massive debts, were made solely to boost the bank's share price, reports Reuters. The bank's former chief executive and chairman of the board received prison terms, along with one of its majority owners and the chief of its Luxembourg branch. The sentences are the heaviest Iceland has ever handed down for financial fraud, but prosecutors say a bigger case against Kaupthing is in the works. (In other Iceland news, police recently shot somebody dead—for the first time in the country's history.)

Kaupthing Bank brought Iceland's economy to its knees when it collapsed in 2008.
Kaupthing Bank brought Iceland's economy to its knees when it collapsed in 2008.   (AP Photo/Anja Niedringhaus)
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