Could Icelandic justice be in view?

  • anrigaut
  • 19/10/08 30/10/09
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Posted: Fri, 20/01/2012 - 22:31

Recent weeks have seen some hopeful (to me at least) signs that the long-awaited day of reckoning may perhaps at last be approaching for the Viking pirates who enriched themselves hugely through the casino banks funded by our money and then siphoned off as much as they could in the dying days (or even in what should have been the dead days), leaving the likes of us to take the rap. Can we dare to hope that the major perpetrators will one day be punished and feel some of the pain they inflicted on others by their apparently unbounded and thoughtless (Kaupthinking) greed?

The Winding-up Boards of all three collapsed Icelandic banks appear to be going after managers and executives with punishing law-suits which, if successful, could help fill the coffers for the benefit of creditors. In the case of Kaupthing, we stand to gain some financial benefit from any successful actions (through both KSFUK's claim against K hf and our parental guarantee). And even if the financial impact is limited or non-existent, justice will surely be sweet?

I have posted links to several recent reports as News items. But I thought it might be useful to group them together here, where hopefully others may be added. I hope I have accurately captured the essential in my brief summaries below – see the links for more details.

In November (2011), it was announced that the former CEO of Kaupthing, suspected of market abuse, had been called in for questioning as part of the ongoing investigations of the Special Prosecutor's Office (SPO). At the same time, the SPO was reported to be “currently investigating more than 200 cases, ten of which are expected to be completed before the end of this year.”
http://www.icelandreview.com/icelandreview/search/news/Default.asp?ew_0_...

This was followed in December by the news that six former Kaupthing executives, whose personal responsibility for loans they had received to buy shares in the bank had been lifted shortly before the collapse, had been judged liable to repay these loans. Action is being taken to ensure that assets both in Iceland and overseas can be seized to cover the debts (subject to confirmation by the Supreme Court). These are just some of “tens of cases” said to be still in court.
http://www.icelandreview.com/icelandreview/daily_news/Kaup%C3%BEing_Bank...

Then this month came news that the winding-up committee of Glitner has filed charges against two of its former CEOs for damages relating to a dubious loan.
http://www.icelandreview.com/icelandreview/search/news/Default.asp?ew_0_...

and that the Landsbanki Winding-Up Board is suing the top management of the bankrupt bank, board-members and insurers for damages caused by not stopping the bank’s operations on 3 October 2008 when, according to the WUB, the bank was de facto bankrupt.
http://uti.is/2012/01/landsbanki-winding-up-board-sues-managers-non-exec...

http://www.icelandreview.com/icelandreview/search/news/Default.asp?ew_0_...

http://uti.is/2012/01/more-on-landsbankis-last-hours/

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“Shock” acquittal of Icelandic bankers

  • anrigaut
  • 19/10/08 30/10/09
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  • Tue, 26/01/2016 - 13:06

As posted in the News forum, but included here to keep all these cases together:

"Three senior executives of Iceland’s now defunct Kaupþing bank accused of lending unauthorised money have been cleared of all charges by a Reykjavik court this morning.

Hreiðar Már Sigurðsson (former Director of the bank), Sigurður Einarsson (former board chairman) and Magnús Guðmundsson (former CEO of Kaupthing Luxembourg) were charged with breach of trust after lending over €500 million to two foreign companies in 2008 without authorisation from the bank’s lending committee. ..."

http://icelandmonitor.mbl.is/news/politics_and_society/2016/01/26/shock_...

This appears to be the case referred discussed on Sigrun's blog here: http://uti.is/2015/12/when-kaupthing-tried-to-move-its-cds-in-2008-with-...


Failed Justice

  • Jean-Charles Marlier
  • 10/10/08 31/05/09
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  • Wed, 27/01/2016 - 07:21

Utterly contemptible but not really surprising;those financial criminals as we well know, have several lives and no doubt,will be up to misdeeds within no time again;they never learn from their mistakes,it's in their genes!

Only in the US,the Law seem to be much tougher for those crooks.

J-Ch


Re Failed Justice

  • anrigaut
  • 19/10/08 30/10/09
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  • Wed, 27/01/2016 - 09:02

Of course, these guys are already in prison. And It may not be the end of the matter:

"Björn Þorvaldsson, the prosecutor in the case, told reporters that there are a number of comments he would make on the ruling. For now, he will concentrate on deciding whether or not to appeal the matter to the Supreme Court."

http://grapevine.is/news/2016/01/26/kaupthing-bankers-acquitted-of-addit...

In previous cases, the Supreme Court has generally been tougher than the District Court. Will keep an eye on what follows and update here.


Acquittal of Icelandic bankers appealed

  • anrigaut
  • 19/10/08 30/10/09
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  • Mon, 07/03/2016 - 20:20

It seems the prosecutor did indeed decide to appeal this acquittal:

"Iceland’s public prosecutor has lodged an appeal against the acquittal of three senior Icelandic bankers cleared of lending unauthorised money back in January."

http://icelandmonitor.mbl.is/news/news/2016/03/07/acquittal_of_icelandic...


What money can’t buy: extra services in an Icelandic prison

  • anrigaut
  • 19/10/08 30/10/09
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  • Fri, 27/11/2015 - 18:25

Some light reading for the weekend - really, you couldn't make it up!

"Thirteen people, mostly ex-bankers, have now been sent to prison in cases connected to the banking collapse brought by the Office of Special Prosecutor. Four of these prisoners keep giving rise to media coverage in Iceland: earlier in November it turned out that they had applied for a riding course, organised by the Agricultural University of Iceland. In the end, the director of the Prison Service refused to accept that this expensive course fulfilled the set criteria for prisoners’ rehabilitation. It also ensued that these prisoners have allegedly made use of PR firms. ...."

http://uti.is/2015/11/what-money-cant-buy-extra-services-in-an-icelandic...


Justice Update

  • D RAM
  • 13/10/08 01/08/14
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  • Sat, 24/10/2015 - 14:29

Anrigaut,

Many thanks for your comprehensive update. You really are a star.

D RAM


thank you

  • sunny1
  • 16/10/08 30/05/14
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  • Fri, 23/10/2015 - 10:07

An enormous amount of work assembled here Anrigaut. Thank you for gathering it and presenting it to us.


Thanks for your thanks

  • anrigaut
  • 19/10/08 30/10/09
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  • Fri, 23/10/2015 - 11:05

Thanks for your thanks sunny!

Keeping an eye on and reporting developments on this and all matters related to our affair has become part of my routine. As sambururob says, while these convictions don't benefit us financially, there is some satisfaction in the fact that, at least in Iceland, financial crime does not always go unpunished - something which seems sadly not to be the case in the UK.


26 bankers already sentenced to a combined 74 years in prison

  • anrigaut
  • 19/10/08 30/10/09
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  • Thu, 15/10/2015 - 12:59

A handy review of all the cases ruled on to date in the Supreme Court and/or the District Court:
http://icelandmag.visir.is/article/26-bankers-already-sentenced-a-combin...

In summary:
"To date the Supreme Court has ruled in eight cases. The court has handed down guilty verdicts in six of these cases, acquitted the defendants in one and referred one case back to the District Court of Reykjavík. Several cases are now making their way from the District Court to the Supreme Court. Judging by the previous rulings of the Supreme Court most observers believe the court will either uphold guilty verdicts and hand down more severe sentences or overturn acquittals."

The article confirms that "Former managers of Kaupþing top the list".

"Eleven former bankers have been sentenced to four and a half years or more in prison. The former top bosses of Kaupþing have received the longest sentences to date. Hreiðar Már Sigurðsson, the former CEO of failed bank Kaupþing and Magnús Guðmundsson, the CEO of Kaupþing Luxembourg, top the list, having been sentenced to a combined six years in prison for extensive market manipulation, embezzlement and breach of fiduciary duties. The maximum combined sentence for financial crimes according to Icelandic law is six years.

Courts can sentence people to longer prison terms than six years in cases where the crimes are systematic and repeated, and in cases where people make a living from engaging in financial crimes. Future cases against Magnús and Hreiðar Már will determine if the courts consider the two to have engaged in financial criminality of a scale which justifies expanding on the maximum sentences."

The article concludes with a full list of the sentences handed down by the Supreme Court and the District Court rulings appealed to the Supreme Court.


It doesn't get any money back

  • sambururob
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  • Thu, 22/10/2015 - 07:51

It doesn't get any money back but it does make you feel better. Nice to know that you were the victim of a crime rather than stupidity in depositing money in a certain bank.


MANY THANKS

  • mikepapa
  • 10/10/08 n/a (free)
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  • Fri, 09/10/2015 - 13:41

Dear Anrigaut,

Many thanks for keeping us all up to date.
It is indeed great to see that those that walked off with our hard earned savings are finally being locked up. The prison sentences do seem rather light, however at least some form of justice is finally being dished out!

Kind regards,

Mike


Landsbanki managers sentenced in Imon case

  • anrigaut
  • 19/10/08 30/10/09
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  • Fri, 09/10/2015 - 05:52

Just for the record, more jail sentences for breach of fiduciary duty have been handed down by the Icelandic Supreme Court - this time concerning Landsbanki:
http://uti.is/2015/10/three-landsbanki-managers-sentenced-to-jail/

This was another case of a bank lending money to buy its own shares.

Interestingly, two of the three accused - the bank's CEO (sentenced to 3 1/2 years) and the director of company lending (18 months) - had previously been acquitted by the District Court, with only the the director of proprietary trading (9 months) originally found guilty.


Another Kaupthing case

  • anrigaut
  • 19/10/08 30/10/09
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  • Wed, 07/10/2015 - 12:36

Yet another Kaupthing case is now before the Reykjavik District Court.

As reported in Iceland magazine, it is a case "involving allegations the managers of Kaupþing fraudulently transferred large sums to a company called Marple Holdings and for a subsequent purchase of bonds from the company".

The report continues:
"The Special Prosecutor has charged Hreiðar Már Sigurðsson, the former CEO of Kaupþing, and Guðný Arna Sveinsdóttir, the former CFO of Kaupþing, with embezzlement in the case, Magnús Guðmundsson the CEO of Kaupþing Luxembourg for participating in the embezzlement and Skúli Þorvaldsson, investor and the listed owner of Marple Holdings, for cover-up. The former Kaupþing bosses have claimed innocence while Skúli has denied having actually owned the company."

The Reykjavík District court is due to hand down its verdict on Friday, 9 October. However, it appears that Sigurðsson's lawyers are asking one of the judges to recuse himself because of his involvement with anti-corruption organization. If he recuses himself, the case will have to be reheard by the court.

http://icelandmag.visir.is/article/former-ceo-kaupthing-bank-wants-judge...

Update 7 Oct 215:
The motion for the judge to recuse himself has been rejected by the Reykjavik District Court. Verdict in the case expected this Friday (9 Oct).
http://grapevine.is/news/2015/10/07/judge-will-not-be-forced-to-leave-tr...


Kaupþing bosses found guilty of embezzlement - Marple case

  • anrigaut
  • 19/10/08 30/10/09
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  • Fri, 09/10/2015 - 12:21

The two Kaupthing CEOs and investor in the Marple Holdings case were found guilty today by the Reykjavik District Court, with prison sentences of between 6 and 18 months:
http://icelandmag.visir.is/article/kaupthing-bosses-found-guilty-massive...

As Iceland Magazine reports:
"The list of jailed bankers keeps getting longer
Hreiðar and Magnús [the Kaupthing and Kaupthing Luxembourg CEOs] are already serving 5.5 and 4.5 year sentences for market manipulation. Earlier this summer the two were sentenced by the Reykjavík District Court to prison in a separate market manipulation case, along with five other top Kaupþing bosses. Yesterday three top managers of failed bank Landsbankinn were found guilty by the Supreme Court of market manipulation and breach of fiduciary duty."


Embezzled Funds

  • D RAM
  • 13/10/08 01/08/14
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  • Tue, 13/10/2015 - 04:53

Presumably a forlorn hope that the embezzled funds can be recovered for distribution to creditors of KHf ?


Re Embezzled Funds

  • anrigaut
  • 19/10/08 30/10/09
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  • Tue, 13/10/2015 - 11:25

Hi D RAM,

Probably. Though the report I linked to does say "The three were also sentenced to pay the estate of Kaupþing damages. " - whatever that implies. But whether they will be able to pay is anyone's guess. And in any case, I guess we have to await the outcome of the inevitable appeal to the Supreme Court.


Icelandic prison life

  • anrigaut
  • 19/10/08 30/10/09
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  • Fri, 26/06/2015 - 20:04

Six more convictions today (as posted in the News section) including, if my memory serves me correctly, the guy who signed our infamous parental 'guarantee' (Ingolfur Helgason, who got the biggest sentence - 4 & a half years).

Still, it seems Icelandic prison life is not without its comforts, at least for rich banksters:
http://icelandmag.com/article/jailed-bankers-said-be-living-luxury-causi...


At least they get prison. In

  • sambururob
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  • Sat, 27/06/2015 - 07:40

At least they get prison. In UK they would get a knighthood!


Re: at least they get prison ...

  • anrigaut
  • 19/10/08 30/10/09
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  • Sat, 27/06/2015 - 16:27

Some strong comment on Sigrun's latest blog from Tony Shearer (who you will remember was the CEO of Singer & Friedlander UK who resigned when it was taken over by Kaupthing in 2005) :

" Sigrun,
Thank you very much for that information.
You are right; the authorities in the UK certainly could prosecute. But the big banks and the auditing firms in London have so corrupted the system that the politicians have made sure that no prosecutions happen.
When I was interviewed (as a witness!) by the SFO I said that I thought that the biggest issue in a prosecution would be which was the jurisdiction in which country the fraud took place. The Icelanders have shown that that is not an issue; and we know for sure that most of the fraudulent activities took place in the UK.
The truth is that, as Sigurdur Einarsson said to me, London welcomes people (“crooks”) such as him with open arms; we are the money-laundering capital of the world. We have the banks, the accounting firms, the lawyers and the PR agents to aid those criminal activities. Indeed to become Chairman of the FCA you really need to have been party to all these activities.
And without the taxes and money from those activities the country’s finances would be in an even worse state.
So all credit to Iceland for prosecuting these individuals. All shame to the UK for not doing so.

Tony Shearer"

http://uti.is/2015/06/yet-another-fraud-investigation-ending-in-prison-s...


Epic Kaupthing trial begins

  • anrigaut
  • 19/10/08 30/10/09
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  • Tue, 21/04/2015 - 09:56

As announced in the News section, the long-awaited big market manipulation trial opens today in Iceland, with nine defendants and over 50 witnesses. It is expected to last at least 3 weeks.
http://www.mbl.is/english/news/2015/04/20/epic_kaupthing_abuse_trial_beg...
http://icelandmag.com/article/kaupthing-bank-trial-might-be-one-largest-...

For those who can get their heads around Icelandic names, those charged are:
Hreiðar Már Sigurðsson,
Sigurður Einarsson
Ingólfur Helgason
Einar Pálmi Sigmundsson
Birnir Sær Björnsson
Pétur Kristinn Guðmarsson
Magnús Guðmundsson
Bjarki H Diego
Björk Þórarinsdóttir

This information comes from Sigrun in response to a query on her blog from Tony Shearer, who clearly continues to take a keen interest in the Kaupthing affair: http://uti.is/2015/04/the-latest-re-stability-tax/

Three of the above are among the 'Al Thani case' four who are already in jail.


Re Epic Kaupthing Trial

  • anrigaut
  • 19/10/08 30/10/09
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  • Tue, 21/04/2015 - 16:48

Update on 'Epic Kaupthing Case'

  • anrigaut
  • 19/10/08 30/10/09
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  • Fri, 07/10/2016 - 12:37

In June 2015, the District Court found 7 of the 9 defendants in this case guilty of market manipulation and acquitted 2. The Supreme court has now overturned the acquittals and found all 9 guilty:

http://icelandmonitor.mbl.is/news/politics_and_society/2016/10/06/icelan...

Also reported by the online Independent:
http://www.independent.co.uk/news/world/europe/iceland-to-sentence-ninth...


Good

  • sambururob
  • 10/10/08 n/a (free)
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  • Sat, 08/10/2016 - 11:39

They jail bankers in the States too. Only the UK where the justice system actively encourages bank fraud by taking no action.


BEYOND NORMAL THINKING ...

  • anrigaut
  • 19/10/08 30/10/09
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  • Wed, 08/04/2015 - 10:12

Just a little light reading on the infamous concept of Kaupthinking:

In a 2007 advertisement for Kaupthing, celebrated comedian John Cleese described the bank’s staff as such: “You say jump! They ask how high?” Now, however, it’s time for the bosses to do the gymnastics. Ordered to move by a higher authority, the Kaupthing four find themselves in a hitherto unimaginable situation, accurately described by former queen of Iran Farah Pahlavi, whose husband Mohammad Reza Pahlavi’s regime was toppled by the 1979 revolution: “At one point they roll out the red carpet for you—the next day you have to wait in line to be fingerprinted at the airport.”

...

An in-house Kaupthing pep video made its way online shortly after the collapse. It is a bombastic video, featuring a thick soup of images depicting major historical events, interspersed with clips from Hollywood blockbusters, accompanied by U2’s “Where The Streets Have No Name.” The clip introduces the concept of “Kaupthinking,” a peculiar way of thinking that’s somehow “beyond normal thinking.” Reminiscent of Yoko Ono’s conviction that peace can be realized by imagining it, Kaupthinking is based on the idea that in order to achieve something “we just have to think we can.” Another in-house video teaches us that “we can choose to see the difficulty in every opportunity, or the opportunity in every difficulty.”

It seems obvious which of the two perspectives suits the bankers now doomed to spend the days in quarters far below their usual standards. Stuck in tiny prison cells, isolated from the outside world by a quadrangle of concrete, one can expect their heads to be haunted by a tireless loop of Bono’s anguished voice repeating the opening lines U2’s hit: “I want to run / I want to hide / I want to tear down the walls that hold me inside.”

...

Full article here:
http://grapevine.is/mag/column-opinion/2015/04/07/beyond-normal-thinking...


You cheer us up. Thanks. Rob

  • sambururob
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  • Wed, 08/04/2015 - 17:35

You cheer us up. Thanks.
Rob and Wendy.


Bankers behind bars ...

  • anrigaut
  • 19/10/08 30/10/09
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  • Tue, 24/03/2015 - 21:05

I've just posted a link as a News item to an article in the Reykjavik Grapevine which provides a very readable account of the current state of play in the various court cases in Iceland.

It confirms that more cases are on the way and in particular that in April, the District court will hear "an extensive case against nine top-level managers of Kaupthing, alleging that the bank engaged in systematic and extensive market manipulation."

As usual, I'm adding the link here: http://grapevine.is/mag/articles/2015/03/24/bankers-behind-bars-is-icela...


Thanks Anrigaut. I get the

  • sambururob
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  • Tue, 24/03/2015 - 21:34

Thanks Anrigaut.
I get the impression Iceland is a little more proactive about hunting down fraudulent bankers than the UK. We seem to just give them a knighthood!


Next - and bigger - Kaupthing case due in April

  • anrigaut
  • 19/10/08 30/10/09
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  • Fri, 13/02/2015 - 11:02

As noted in the Icelandic press yesterday:

Sigurdsson and Einarsson are facing another and bigger case against Kaupthing in which it is accused of market manipulation. It is due to court on April 21st and is expected to take four weeks. In all nine former employers of the Kaupthing bank are facing prison time if convicted.
http://www.visir.is/iceland-jails-former-kaupthing-bank-bosses/article/2...

Something to look forward to!


Kaupthing convictions in 'Al Thani case' upheld by Supreme Court

  • anrigaut
  • 19/10/08 30/10/09
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  • Fri, 13/02/2015 - 11:03

Iceland continues to show the way. As reported yesterday, the convictions and jail sentences for market manipulation of four Kaupthing bosses were upheld yesterday by the Icelandic Supreme Court.

http://uti.is/2015/02/supreme-court-rules-in-al-thani-case-imprisonment-...

As reported today by Reuters:
the country's special prosecutor said showed it was possible to crack down on fraudulent bankers.
...
The verdict is the heaviest for financial fraud in Iceland's history, local media said. Kaupthing collapsed under heavy debts after the 2008 financial crisis and the four former executives now live abroad. Though they sometimes returned to Iceland to collaborate with the court investigation, none were present on Thursday.The verdict is the heaviest for financial fraud in Iceland's history, local media said. Kaupthing collapsed under heavy debts after the 2008 financial crisis and the four former executives now live abroad. Though they sometimes returned to Iceland to collaborate with the court investigation, none were present on Thursday.

http://www.reuters.com/article/2015/02/13/us-iceland-bankers-idUSKBN0LG2...

So while this is excellent news and cause for some satisfaction, I am wondering what are the chances that these guys, who now live 'abroad' and were - unsurprisingly - not present when the ruling was given, will actually serve time.... ?

Update:
I raised this question with Sigrun, who replied thus on her blog:
I don’t think there is any chance of them evading going to prison. Yes, they all live abroad but I believe that is no shelter from going to prison. There are extradition agreements between countries. And living like a fugitive is not a good life. I can’t see but one end to that story: doing the time in prison. These men, or their defense lawyers, have all tried their best to evade the ruling, delay the case etc.. Still I can’t see but the one end to this story.

I just hope she is right!


More on the 'Al Thani' Supreme Court ruling

  • anrigaut
  • 19/10/08 30/10/09
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  • Sat, 14/02/2015 - 10:24

The court ruling was obviously in Icelandic. But I just picked up this translated extract as quoted in Iceland Review:

The Supreme Court’s unusually harshly-worded ruling stated that the defendants were guilty of “thoroughly organized violations, committed out of determined intention and unprecedented impudence and disregard.”

“The defendants’ conduct … involves a serious breach of trust against a large public limited company, leading to massive loss in funds,” the verdict concluded.

http://icelandreview.com/news/2015/02/13/iceland-supreme-court-al-thani-...


Turning Kaupthing 'King Rats'

  • VikingRaider
  • 10/10/08 31/05/09
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  • Sun, 15/02/2015 - 14:08

One wonders if a guarantee of an early release and limited fines for the guilty in exchange for full disclosure of where the cash was hidden and who holds the keys might be of benefit to all. Compensation for distress, inconvenience and 'hurt feelings' would be welcomed by this former depositor.


Icelandic Saga

  • Blades
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  • Sat, 14/02/2015 - 04:48

Continued thanks for keeping us all up to date on these legal developments. It will be very gratifying if justice is eventually served.


Your vigorous follow up of brigands

  • Wombat761
  • 30/01/09 20/03/15
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  • Fri, 05/12/2014 - 02:37

Thank you for your inestimably efficient leadership of the latter part of the DAG /KSF IOM winding up saga and for your wonderfully informtaive comment and actions on behalf of all of us.

Take care, keep safe and have a wonderful Christmas.

Best Regards


Ex-Landsbanki bankers sentenced for market manipulation

  • anrigaut
  • 19/10/08 30/10/09
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  • Wed, 19/11/2014 - 14:28

Judgments continue in Iceland ...

Three ex-Landsbanki bankers have been sentenced (in Icelandic) at Reykjavík County Court in an extensive market manipulation case. The bankers were charged with manipulating Landsbanki share price almost a year up to the collapse of Landsbankinn October 7 2008. The action was judged to have influenced the share price of the bank, i.e. slowed its fall and prevented the shares falling in price. Consequently, price movements were not properly reflected and the share price appeared stronger than it would have been without the intervention.

Landsbanki ex-CEO Sigurjón Árnason was sentenced to a 12 months imprisonment, of which nine months are suspended. Two others, Júlíus Steinar Heiðarsson and Ívar Guðjónsson both working on the bank’s proprietary trading desk, were sentenced to nine months imprisonment, six of which are suspended. The fourth charged, Sindri Sveinsson, was acquitted.

http://uti.is/2014/11/three-ex-landsbanki-bankers-sentenced-in-market-ma...


Ex-Kaupthing bosses face more charges

  • anrigaut
  • 19/10/08 30/10/09
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  • Tue, 08/07/2014 - 21:51

Yet more charges brought in Iceland - the wheels continue to grind ...

"Iceland’s special prosecutor has indicted three former Kaupthing Bank hf executives and one of the bank’s clients for embezzlement and violating their legal mandate before the lender’s 2008 collapse.

Former Chief Executive Officer Hreidar Mar Sigurdsson, ex-Chief Financial Officer Gudny Sveinsdottir and Magnus Gudmundsson, the head of the Luxembourg unit, were charged with embezzling 3 billion kronur ($26.3 million) into the account of a company controlled by a client, according to the indictment dated June 26 and obtained by Bloomberg today. The client was charged with participating in and covering up the transactions and money laundering.

The prosecutor also alleges that Sigurdsson, Sveinsdottir and Gudmundsson violated their mandate when they had Kaupthing purchase bonds in euros and U.S. dollars from the same client, at a price that was higher than market value.

As a part of the investigation, the special prosecutor found 44.3 million euros ($60.2 million) in bank accounts owned by companies controlled by the client. Prosecutors are demanding that those assets are seized by the state.
...

This is the fourth indictment for Sigurdsson and Gudmundsson. They were found guilty by the District Court of Reykjavik in December and sentenced to 5 1/2 and 3 1/2 years in prison, respectively. That case has been appealed to the Supreme Court. Two other cases have yet to be decided by the District Court."

http://www.bloomberg.com/news/2014-07-08/iceland-prosecutor-indicts-ex-k...


Four more bankers sentenced by Reykjavik Court

  • anrigaut
  • 19/10/08 30/10/09
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  • Fri, 27/06/2014 - 15:14

Prison sentences of 4-5 years have just been handed down by the District Court in Reykjavik in yet another market manipulation case, this time involving Glitnir : http://uti.is/2014/06/reykjavik-county-court-hands-out-severe-prison-sen...

As with the previous cases, those convicted will no doubt appeal and none of these cases will to be settled until ruled on by the Supreme Court. Other cases are, it seems, in the pipeline. The wheels of justice grind slowly, but at least in Iceland they are grinding!


Four more bankers sentenced by Reykjavik Court

  • tonycBrisbaneOz
  • 12/10/08 31/05/13
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  • Sun, 29/06/2014 - 12:07

A sentence shorter than the time it will have taken to return less than 100% of our deposits.


Acquittals and close connections

  • anrigaut
  • 19/10/08 30/10/09
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  • Mon, 09/06/2014 - 13:04

Perhaps unsurprisingly, Sigrun's latest blog seems to suggest that Icelandic Justice may sometimes be less than perfect:

"Acquittals in major cases brought by the Office of the Special Prosecutor have made headlines in Iceland and elsewhere. In addition, it has now surfaced that an expert, called in to be a lay judge in the Aurum case is the brother of Ólafur Ólafsson, one of the four indicted in the al Thani case. Jón Ásgeir Jóhannesson, at the time Glitnir’s largest shareholder, was indicted in the Aurum case, together with Glitnir’s ex-CEO Lárus Welding and two Glitnir employees. Both were acquitted. ... "

You can read more here: http://uti.is/2014/06/acquittals-and-close-connections/


New indictments against Kaupthing managers

  • anrigaut
  • 19/10/08 30/10/09
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  • Mon, 12/05/2014 - 23:07

Just to keep it all together (also posted as News).

Posted today on Sigrun's Icelog:

Last week, the Office of the Special Prosecutor initiated criminal proceedings against three Kaupthing managers for breach of fiduciary duty. The managers are Sigurður Einarsson formerly chairman of Kaupthing, its CEO Hreiðar Már Sigurðsson and Kaupthing Luxembourg managers Magnús Guðmundsson.

At stake are loans to four companies, in total €510m, owned by Ólafur Ólafsson, the bank’s largest shareholder, Conservative party donor and at one time a Kaupthing board member Tony Yerolemou and two big clients of the bank, Kevin Stanford and his ex-wife Karen Millen. The loans were used to fund two companies, which traded in Kaupthing’s CDS, in order to encourage a fall in the CDS and reduce the bank’s financing cost. These CDS deals were done in cooperation with Deutsche Bank. None of the clients nor Deutsche are under investigation at the OSP in relation to this scheme.

The loans were issued to BVI companies with little or no other assets than the financial assets, which were being funded. In some cases Kaupthing issued loans to these companies without the knowledge of their owners. According to the claims, the loans were not taken up in the bank’s credit committees nor were credit committees told of previous loans to these companies.

Although there are higher sums at stake in two large market manipulation cases against Kaupthing and Landsbanki managers – cases that consist of actions stretching over some time, this latest case is the largest single case so far and is likely to remain so. So far, all the OSP cases relating to the collapse of the banks are stories already known from the SIC report, published in April 2010 and this CDS case is no exception.

http://uti.is/2014/05/new-indictments-against-kaupthing-managers/


to Anrigaut - re new indictments against Kaupthing managers

  • Gordon 45
  • 22/10/08 n/a (free)
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  • Thu, 15/05/2014 - 18:31

Hi Anrigaut,

Thanks once more for this update on the Kaupthing situation - really obliged. And due to your excellent updates on these matters it allows me or anyone else the leeway on whether or not to go into your links to see Sigrún Davíðsdóttir's Icelog Blogs.

I don't normally go beyond your data, but occasionally I do go into your links (thank you) for more info. I did on this occasion as I feel, and have done for some time now, that the main drawback in reaching a conclusion by the JLs to our KSFIOM Liquidation and that of E&Y in (KSFUK's) Administration may not be the Loan books but that of the WuC of Kaupthing hf getting their Composition Agreement through the Icelandic Government and their CBI (Central Bank of Iceland). And if not that then the eventual Bankruptcy situation that has to take place.

We know that a Composition Agreement was put forward in October 2012 for approval by the Icelandic government - no reply yet - 18 months on. But unfortunately, as you probably already know, it is not only the Kaupthing hf situation but that of Glitner and Landsbanki Banks that also concern the Icelandic Government.

So, a lot may depend on how our JLs and the KSFUK Administrators approach this problem with the WuC of Kaupthing hf and what actions the Icelandic Government take in relation to the whole situation - because it appears there are various options according to Sigrún - we just have to wait and see, because the eventual way forward could help bring our Liquidation to hopefully a not to far distant end or delay it beyond our loan books being finalised.

But thank you once more for bringing this important info to our attention at this time.

Gordon 45.


A model with dealing with finanacial terrorists USA perspective

  • glen07
  • 21/10/08 n/a (free)
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  • Sun, 15/12/2013 - 02:10

http://rt.com/op-edge/iceland-bank-sentence-model-246/

Iceland’s jailed bankers ‘a model’ for dealing with ‘financial terrorists’

Published time: December 14, 2013 15:05

By jailing four top officers of Iceland's failed Kaupthing Bank, the country showed the world the right way to deal with the people largely responsible for the 2008 financial crisis, said Charlie McGrath, founder of news website, Wide Awake News.

The US and other nations must take it as a model for the next time the too-big- to-fail corporations screw things up and ask for a bailout with taxpayers’ money, he added.

RT: The jail terms are the biggest penalty for such crimes in Iceland's history. What is the significance of the precedent?

Charlie McGrath: It’s significant in regards to the 2008 crisis, because if you happen to be living here in the United States, where the majority of these too-big-to-fail institutions are headquartered, where the true corporates are, where the CEOs and COOs of these massive corporations live. Not one of them went to jail. Not one of them has been indicted. There’s been a handful of token fines, that had been paid by these corporations – and let me reiterate ‘by the corporations’, not by these individuals themselves.

So we see an actual government, an actual people and nation stepping up and saying: “I’m sorry, you committed fraud. You screwed over a nation. And you are going to pay for it by your butt being put behind bars.”

This is exactly what needed to happen in the United States and in the rest of the world. And my hat is off to Iceland for standing up to these bankers.

RT: Could there be broader ramifications of this case. Is Iceland setting a new bar for prosecution of financial fraud?

CMcG: I hope so, but I am not optimistic of that. Unfortunately I myself and lots of other people – Jim Rogers, Mark Favors, Harry Dent – we all believe that there is another mega-collapse coming.

And let’s face it, these institutions that we called too big to fail in 2008 – the six largest of them are 37 percent bigger than they were in 2008. They hold sway over the economy. They hold sway over the government. And we are doing the exact same things that led to a collapse in 2008.

I truly believe that 2008 was a financial terrorist event. It was a financial 9/11 committed by these institutions, and when we go into the next crisis that is going to affect the entire globe. I hope that Iceland is held up as a model on how you deal with this scum!

RT: In light of this scandal, how much involvement do you think governments should have over the dealings of financial institutions?

CMcG: Here in the United States, we pretend that it is socialism when you start talking about government control over financial institutions. But we have something far worse here.

We take the so-called private corporations, these free-market capitalist corporations –they are in control of the economy here – we take these corporations and put them on a pedestal, and when they fail, we spread their debt to the people of this country.

That’s something far worse than socialism. It’s the worst form of fascism! So to pretend that government has no place in overseeing these institutions is to sit back and say: “Go ahead, bankers! Go ahead and take over the future of this nation and lead us into financial ruin!” And that’s exactly what happened.

What happened in Iceland is what the people demanded of the government. In 2009 they marched on the parliament and said: “We are not going to take the fraudulent failures of these banks lying down.”

They cordoned off these institutions. They’ve formed state banks. And they hit at the problem head on. They helped the people rather than the banking institutions. So I again hope this is the model that we are looking forward to.


... and a UK perspective ...

  • anrigaut
  • 19/10/08 30/10/09
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  • Sun, 15/12/2013 - 10:27

http://www.theguardian.com/business/2013/dec/15/financial-offenders-name...

"Financial offenders must be named if bank reforms are going to work
The shocking tale of Lloyds' mis-selling culture ended with a deserved £28m fine. But not one person was singled out for blame. As Iceland shows, that's got to change
...
While the clamour for bankers to be sent to jail may appear undignified, look at the situation in Iceland. The former chairman and chief executive of the collapsed bank Kaupthing were last week given a five-year jail sentence.

Both Hreidar Mar Sigurdsson, the former chief executive, and his chairman Sigurdur Einarsson are expected to appeal against their convictions for fraud and market manipulation.

But still, Iceland is unique in punishing its most senior bankers in such a public way and securing convictions. It may be that the crimes were easier to understand – in Kaupthing's case it related to a loan the bank gave to a Qatari sheikh to buy 5% of its own shares – but still it helps to sate the demand for top bankers to take the blame when things go wrong.
..."

Have added a comment.


Second Kaupthing case due in January

  • anrigaut
  • 19/10/08 30/10/09
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  • Fri, 13/12/2013 - 06:55

According to the BBC's report on the al-Thani case, the Icelandic special prosecutor "told the BBC that there was still another, bigger case against Kaupthing Bank ongoing, in which it is accused of market manipulation. It is due to come to court at the end of January.” Should be interesting!
http://www.bbc.co.uk/news/business-25349240

This is the other big Kaupthing case referred to by Sigrun in her latest blog (which raises the pertinent question of why bankers are not being more vigorously pursued in the UK and elsewhere):
"The three Kaupthing managers now sentenced are also charged in another large market manipulation case, as are managers from Landsbanki and Glitnir (on both cases see here)."
http://uti.is/2013/12/why-are-bankers-investigated-in-iceland-and-not-so...


Al-Thani case: more details

  • anrigaut
  • 19/10/08 30/10/09
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  • Fri, 13/12/2013 - 06:52

The BBC report on the al-Thani case gives some fascinating details on the devious mechanisms employed in the share deal. Sheikh al- Thani has maintained that he was deceived:

"According to the Icelandic media, the charges state that the deal was done by first depositing a loan from Kaupthing bank into shell companies in the British Virgin Islands.

The money then went from there to a Cypriot based company called Choice, which was owned by Olafsson, Sheikh al-Thani and al-Thani's adviser.

From there it was moved to another firm called Q Iceland Finance, also owned by al-Thani, and then finally ended up back in the bank to pay for the shares.

It was never publicly stated that the company owned by Olafsson was party to the deal.

Sheikh al-Thani did not testify but he gave a statement to the prosecutors. In it, he said he did not know of any direct involvement by Olafsson to the deal.

Al-Thani's lawyers, who made an agreement with Kaupthing's administrators, said he considered himself to have been deceived."

http://www.bbc.co.uk/news/business-25349240


Court cases

  • steve
  • 14/10/08 31/05/09
  • unspecified
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  • Fri, 13/12/2013 - 18:29

Over five years on and the chickens seem to be coming home to roost. There is one area in this whole sorry mess that has been overlooked since day one, unless I have really missed something. What? you may be asking!. What really happened before and during the period of takeover from the Derbyshire Building Society. I think this would give a whole new meaning to the phrase "opening a can of worms". Nobody, but nobody from the previous Derbyshire hierarchy has ever had to account for this. Nobody wanted to know about it five years ago, does anyone now? Perhaps there isn't a tin opener big enough for this one.


Court cases

  • Jean-Charles Marlier
  • 10/10/08 31/05/09
  • a depositor
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  • Fri, 13/12/2013 - 21:45

Excellent point Steve,and I am sure a lot of ex Derbyshire depositors would love to know the answer to that
Hopefully someone may have some updates on that issue......


Derbyshire - Can of Worms

  • mikepapa
  • 10/10/08 n/a (free)
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  • Fri, 20/12/2013 - 16:01

As a Derbyshire Account holder, I would love to find a big enough can spanner to get them to 'talk'.
However, I rather thing that one has been well and truly 'swept under the carpet' by our 'honest' international bankers!!

Happy Christmas and New Year to you all.

Mike


Re Derbyshire - can of worms

  • anrigaut
  • 19/10/08 30/10/09
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  • Sun, 19/01/2014 - 13:20

As a fellow ex Derbyshire depositor, I couldn't agree more Mikepapa.

My anger at our treatment by The Derbyshire has just resurfaced on reading the assertion in the book just published by a former employee of Iceland's Special Investigation Commission that "the banks were in fact at the end of the road during the fall (autumn) of 2007". http://www.newsoficeland.com/component/k2/item/266-new-book-bringing-dow...

It 's hard to believe that the directors of The Derbyshire were unaware of the already worsening situation of the Icelandic banks and the risk to their faithful depositors by selling out to Kaupthing at exactly that time, with their full assurances that all would be well. They needed to sell and we were the last of their considerations. As for Aidan Doherty, with his smiling face on that glossy brochure we all got welcoming us to this great and secure 'northern European' bank, surely he must have known he was part of the great Kaupthing gamble in which we were unsuspecting pawns. And the FSC in all that?

But as you say, it's all been well & truly swept under the proverbial carpet and I don't see what could be done now to open the can of worms.


Reykjavik court ruling in 'Al Thani' case

  • anrigaut
  • 19/10/08 30/10/09
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  • Thu, 12/12/2013 - 17:18

The Reykjavik District Court today handed down its long-awaited ruling in the so-called 'Al Thani' case (see Sigrun's blog: http://uti.is/index.php?s=al+thani).

It was worth waiting for!

All 4 charged were convicted for market manipulation and breach of fiduciary duty. Of the 3 Kaupthing top managers, Hreiðar Már Sigurðsson was sentenced to 5 1/2 years, Sigurður Einarsson to 5 years and Magnús Guðmundsson to 3 years. Ólafur Ólafsson, the second largest Kaupthing shareholder, was sentenced to 3 1/2 years.

These sentences are close to those demanded by the Office of the Special Prosecutor (a six year unsuspended imprisonment for Einarsson and Sigurðsson and four years for the other two).

Those convicted will no doubt appeal. But, as Sigrun points out, the District court has so far tended to be more lenient than the Supreme Court. We shall see. But it begins to look as though the top two banksters may be deprived of their liberty for about the same time we were deprived of our funds.

MERRY CHRISTMAS ALL!

Other links:
http://www.bbc.co.uk/news/business-25349240
http://www.reuters.com/article/2013/12/12/iceland-kaupthing-idUSL6N0JR39...


To Anrigaut re 'Al Thani' case

  • Gordon 45
  • 22/10/08 n/a (free)
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  • Thu, 12/12/2013 - 17:28

Hi Anrigaut,

Just on to thank you once more re your updates, especially this one - great news even if no money feeds back to us because of the court outcome.

Gordon 45