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Iceland Sends Four Bank Bosses to the Slammer

The onetime CEO of Iceland’s Kaupthing bank, one Hreidar Mar Sigurdsson, is going to jail for five and a half years for his part in his firm’s downfall — which also helped his country’s economy bottom out in 2008. He’ll be in good company.

Three other former high-level Kaupthing execs, including ousted board Chairman Sigurdur Einarsson, will join Sigurdsson for shorter stints in prison for aiding in the cover-up of a sham deal with a Qatari financier that sank the firm late that year.

Although the BBC pointed out Thursday that the foursome’s punishment amounts to “the heaviest sentences for financial fraud” in the country’s history, it represents a relatively breezy penalty compared with the mass-scale wreckage that ensued.

Still, it adds up to many more days behind bars than certain of their deserving American counterparts are likely to face. Here’s more from the BBC:

The court gave Olafur Olafsson, one of the majority owners three years and Magnus Gudmundsson the former chief executive of the Luxembourg branch, three and a half years.
None of them were in court for the decision but it is expected that they will appeal.

The four were also made to pay their own legal costs for the case, which amount to millions of pounds.

The special prosecutor, Olafur Hauksson, said the deal had influenced the bank’s share price. He also said the loans provided for the deal were illegal.

Mr Hauksson 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.

–Posted by Kasia Anderson.

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