Banker Jail Sentences: Another Lesson For The World From Iceland
Instead of kicking the can and maintaining the zombie nation, Iceland ripped its over-levered bank-based-debacle band-aid off and has slowly but surely emerged from its own crisis (notwithstanding capital controls and pain for many) unlike the rest of the Western world which has reverted to the mean of ignorance and status quo. Now, however, The Guardian reports Iceland has one more lesson to teach the world - an Icelandic court has sentenced four former Kaupthing bankers to jail for market abuses.
Via The Guardian,
An Icelandic court has sentenced four former Kaupthing bankers to jail for market abuses related to a large stake taken in the bank by a Qatari sheikh just before it went under in late 2008.
Weeks before the country's top three banks collapsed under huge debts as the global credit crunch struck, Kaupthing announced that Sheikh Mohammed bin Khalifa bin Hamad Al Thani had bought 5 of its shares in a confidence-boosting move.
A parliamentary commission later said the shares had been bought with a loan from Kaupthing itself.
On Thursday, a Reykjavik district court sentenced Hreidar Mar Sigurdsson, Kaupthing's former chief executive, to five and a half years in prison while former chairman Sigurdur Einarsson received a five-year sentence.
Magnus Gudmundsson, former chief executive of Kaupthing Luxembourg, was given a three-year sentence and Olafur Olafsson – the bank's second largest shareholder at the time – received three and a half years.
In what is by far the largest case brought by Iceland's special prosecutor against former employees of Iceland's failed banks, it was argued that the market had been deceived by information indicating that financing was coming directly from Al Thani's own funds.
Instead of fining the banks (in nothing more than a cost-of-doing-business line item), there are real consequences for the actors involved...
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