Kaupthing and Glitnir banks appear to have colluded to prop up each other’s share prices. Various pieces of evidence have emerged to back up this claim, investigators into the old Icelandic banks say.
Iceland’s FME financial regulator and the special prosecutor into the banking crash are both investigating the old banks and sources claim that plenty of evidence is coming to light on how Kaupthing and Glitnir worked together.
The banks apparently bought their own shares from the market in small batches until they reached permitted limits. Then, RUV reports, they sold those shares to each other in large batches. For example, on 6th September 2007 Kaupthing bought 1.5 billion kronur of Glitnir shares from Glitnir Bank itself. In the same minute, Glitnir bought Kaupthing shares from Kaupthing for the same amount.
Both removed their own shares from their books and were therefore free to start the game all over. In this way the banks fooled the markets and held up their share prices and investigators believe the practice was carried out at the request of the banks’ top people.