CEO And Three Employees Of Icelandic Bank Jailed As Illegal Activity During Financial Crisis Catches Up With Them

on December 12 2013 11:44 AM
Prison cell
A prison cell Reuters

An Icelandic court Thursday sentenced four former bosses of the country’s Kaupthing Bank to between three and five years in prison for illegally trying to boost the firm's fortunes during the global financial crisis.

Sentences were handed down to Magnus Gudmundsson, the former chief executive of the Luxembourg branch; Sigurdur Einarsson, former chairman of the board; Olafur Olafsson, one of the majority owners; and Hreidar Mar Sigurdsson, the former chief executive of the entire bank.

The four were convicted of allowing a sheikh of Qatar's ruling Al-Thani family to buy 5.1 percent of the bank with funds loaned from the bank itself, a practice that is illegal under Icelandic law.

The bank’s share price rallied after the sheikh's illegal purchase, as the disgraced executives attempted to alter the bank’s fortunes in the midst of the Icelandic financial sector’s collapse.

All four convicted executives covered their own legal fees, thought to have run into the millions. 

More News from IBT MEDIA