Former bank executives arrested in Iceland

on January 14 2011 2:37 PM

Two former executives of Iceland's failed Landsbanki bank have been arrested on charges of market manipulation.

Ex-chief executive Sigurjon Arnson and Ivar Gudjonsson, the head of the bank’s corporate finance arm, were ordered to be remanded in connection with the bank's collapse in 2008 due to huge debts that accumulated during the island nation’s prior economic boom.

The government seeks to question five other executives in its investigation of the bank’s failure. Prosecutor Olafur Thor Hauksson has been investigating alleged crimes related to the bank’s collapse, including insider trading allegations.

Two years ago, the former head of another collapsed Icelandic bank, Kaupthing, was the first prominent banker to be detained as part of the investigation.

Iceland is still reeling from the after-effects of the 2008 bank collapse which sent the economy onto a tailspin, damaged the currency and forced the country’s former political leaders.

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