26 bankers already sentenced to a combined 74 years in prison

Posted 15/10/2015 - 12:41 by anrigaut

2015-10-13 23

In two separate rulings last week, the Supreme Court of Iceland and the Reykjavík District Court sentenced three top managers of Landsbankinn and two top managers of Kaupþing, along with one prominent investor, to prison for crimes committed in the lead-up to the financial collapse of 2008. With these rulings the number of bankers and financiers who have been sentenced to prison for crimes relating to the financial collapse has reached 26, and a combined prison time of 74 years.

Former managers of Kaupþing top the list.
Eleven former bankers have been sentenced to four and a half years or more in prison. .....

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Creditors Vote on Deal Setting Iceland Up for Currency Freedom

2015-09-30 23

Iceland is expected to move closer to ending seven years of capital controls on Friday, when the creditors of failed lender Landsbanki Islands hf are due to approve a so-called stability payment.

Under a deal proposed by the Treasury in June, the creditors of Iceland’s failed banks have until the end of the year to either agree to pay a combined contribution of up to $3.8 billion, or face a 39 percent tax equivalent to an estimated $5.1 billion. Landsbanki, now known as LBI hf, is the last of the country’s failed lenders to vote.

The creditors of Glitnir Bank hf and Kaupthing Bank hf have already agreed to pay more than 200 billion kronur ($1.6 billion) and 120 billion kronur, respectively. LBI’s contribution will be "considerably less," Pall Benediktsson, an LBI spokesman, told Bloomberg. He declined to disclose the exact amount.

Central bank Governor Mar Gudmundsson said on Wednesday that technical and legal issues mean the whole process probably won’t be finalized until "the end of the year."

Note: Results of Kaupthing voting are here:

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Kaupthing files an exemption request from capital controls

2015-09-08 23

An exemption application from certain restrictions under the Act on Foreign Exchange (No. 87/1992) was submitted by Kaupthing to the Central Bank of Iceland on Friday, 4 September 2015. The exemption is required in order to make distributions to creditors domiciled outside of Iceland and in order to fulfil the terms of an approved composition agreement. The exemption application is based on a proposal submitted by representatives of certain of the larger creditors of Kaupthing (the “Kaupthing Creditors Proposal”) outlined in the announcement by the Ministry of Finance and Economic Affairs ("Iceland in Continuing Consultations Regarding - Capital Control Liberalization (Kaupthing)") on 8 June 2015. Kaupthing will provide creditors with an update on the progress of the application in due course.

Note: The Ministry of Finance announcement is here:

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More Kaupthing Executives jailed

2015-06-25 23

Six defendants in the Kaupþing market manipulation case, the biggest case of this type in Iceland’s history, have been handed prison sentences ranging from one year to four years and six months.

By fully financing share purchases with no other surety than the shares themselves, the bank was accused of giving a false and misleading impression of demand for Kaupþingi shares by means of deception and pretence.

See also here:
and here:

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Iceland moves on capital controls, to tax money outflows

Posted 08/06/2015 - 16:18 by anrigaut

2015-06-07 23

Iceland said on Monday it would impose a 39 percent tax on creditors wanting to take assets reclaimed from its failed banks out of the country, a first step to lifting capital controls that have been in place since its 2008 crash.

The government hopes the tax will prevent a sudden exodus of capital that could crush the crown currency and hurt the economy as it recovers from the spectacular collapse of the North Atlantic island's bloated banking sector seven years ago.

But creditors with billions of dollars worth of assets frozen in three bankrupt lenders could launch legal proceedings against the country, risking years of action that would keep Iceland locked out of international markets.

The government said investors in Icelandic assets such as government bonds could also get their money out of the country by selling crowns to the central bank. Alternatively, they could reinvest their capital in newer government debt that will be convertible out of crowns at maturity.

Because the central bank controls the exchange rate, investors using its currency auctions to repatriate their money could get a less favourable price for their crowns than in the currency markets.

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A 40% exit tax to be imposed on foreign investors

Posted 05/06/2015 - 14:29 by anrigaut

2015-06-04 23

The Minister of Finance introduced a plan to lift the capital controls at a cabinet meeting Friday morning. According to the sources of DV, which broke the news, the plan is based on a 40% exit tax on foreign investors holding claims on the banks which collapsed in 2008, unless they reach an agreement which ensures the withdrawal of claims does not threaten the financial stability of Iceland.
According to today’s reports the government will impose a 40% exit tax, billed a “financial stability tax” on foreign holders of Icelandic krona, which are overwhelmingly investors who own claims on the fallen banks, unless they reach an agreement with the government about a withdrawal of their claims which ensures the financial stability of Iceland. According to the sources of DV this agreement must be reached “in the next few weeks”, otherwise the tax will be imposed.

According to the sources of DV this plan will result in the government receiving “at least” 500 billion ISK (3.8 billion USD/3.4 billion EUR).

The details of the plan will be revealed to the public on Monday.

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Failed Icelandic Bank Debt Said to Gain as Controls May Ease

Posted 30/05/2015 - 06:35 by anrigaut

2015-05-28 23

Trading in debt issued by Iceland’s failed banks is picking up as hedge funds and other investors anticipate a removal of capital controls, according to two people familiar with the matter.

LBI hf and Glitnir hf’s defaulted debt rose about one cent to 11.75 cents and 34 cents on the euro respectively, about two cents higher than in January, said two people who asked not to be identified because trading is private. Kaupthing Bank hf’s claims gained half a point this week to 24 cents, they said.

Trading on debt claims denominated in euros increased this week as new buyers joined the market amid speculation foreign creditors may soon be able to repatriate some of the $6 billion that has been trapped behind capital controls.

Finance Minister Bjarni Benediktsson said on Wednesday the government will propose the law “in the next few days,” paving the way for the repayment of creditors to the nation’s major lenders, which went bust in 2008. The bills will likely be revealed next week, Sigurdur Mar Jonsson, a spokesman for the government, said by telephone on Friday. ...

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Capital controls action… without unleashing the litigation hounds

2015-05-18 23

Will they or won’t they? That is the question regarding how, if and when the Icelandic government will take the long-announced decisive action on easing the capital controls.

The news keeps seeping out in Iceland is that the Icelandic government is just about to present a plan for lifting capital controls. That would then, most likely and uncontroversially, entail the second part of the CBI action from earlier, when investment opportunities for offshore ISK were reined in. Seems, as I mentioned in a blog on earlier CBI action, that this would then be bonds, most likely in FX, with long maturity.

The main interest for foreign creditors will be what measures are chosen regarding the estates of the failed banks, most notably what form of levy or tax will be chosen. Stability tax is the latest jargon to circulate whereas minister of finance Bjarni Benediktsson mentioned an ISK haircut in his March report on capital controls progress.

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Supreme Court rules in al Thani case: imprisonment confirmed

Posted 12/02/2015 - 17:39 by anrigaut

2015-02-12 (All day)

“The results today that it is possible to bring complicated financial cases to court and get conviction,” Ólafur Hauksson head of Office of the Special Prosecutor said to Icelog, now that the Supreme Court has ruled in one of the OSP’s major cases, the al Thani case. “Building up the expertise has been a long process but the ruling today demonstrates that setting up an office, which didn’t not exist earlier, was fully justified. No society can tolerate that certain parts of it are beyond law and justice.”

Those four charged were Sigurður Einarsson chairman of Kaupthing board, Magnús Guðmundsson manager of Kaupthing Luxembourg, Kaupthing CEO Hreiðar Már Sigurðsson and Ólafur Ólafsson the bank’s second largest shareholder. Reykjavík District Court had earlier ruled in the case where Einarsson was sentenced to 5 years in prison, Guðmundsson 3 years, Sigurðsson 5 1/2 years and Ólafsson 4 1/2 years. The Supreme Court has confirmed the ruling over Sigurðsson whereas Ólafsson has now been sentenced to 4 1/2 years, Einarsson to 4 years instead of 5 years and Guðmundsson to 4 years.

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Iceland Targets Creditor Writedowns as Accord Sought This Year

Posted 10/07/2014 - 08:11 by anrigaut

2014-07-09 23

The creditors in Iceland’s failed banks will need to accept writedowns of their assets as the government will push for an accord this year to ensure economic stability, Finance Minister Bjarni Benediktsson said.

“We’re trying to maintain stability in Iceland,” he said today in an interview with Bloomberg Television. “Write-offs will need to take place and the market is also showing that this will need to happen if you just look at what’s available in terms of pricing of claims against the estates.”


“We are concerned about the balance of payment going forward,” Benediktsson said. “A solution can be created, the incentives are all here, some people are waiting to gain access to their assets and we are concerned about having the controls for too long.”

Bonds issued by Glitnir last traded at about 29 cents on the dollar, while Kaupthing debt traded at 24 cents, according to website Keldan. Landsbanki bonds traded at just over 5 cents.


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