Iceland’s Supreme Court has rejected appeals by four Kaupthing executives and upheld their prison sentences for their part in the country’s 2008 financial crisis.
The bank executives have been handed the heaviest ever sentences for financial fraud in the North Atlantic island’s history after being found guilty of market manipulation that occurred just prior to the bank’s crash in 2008.
Kaupthing was one of three Icelandic banks, the others being Landsbanki and Glitnir, that collapsed in 2008 and started the country spiralling towards an economic disaster. Before the collapse, bankers in the country were viewed as a symbol of its economic success as its banking sector’s assets increased to 10 times the size of Iceland’s GDP at one stage.
However, following the collapse, the krona value plummeted, while inflation and unemployment shot up. Europe and the International Monetary Fund had to bail the country out, and the damage has yet to be repaired to this day.
Former Kaupthing CEO Hreidar Mar Sigurdsson was handed the longest prison term at five and a half years, while the ex-director of Kaupthing Luxembourg saw his sentence increased from three years to four and a half. Meanwhile, the former chairman of the board Sigurdur Einarsson saw a year knocked off his sentence so will now serve four instead of five and major shareholder Olafur Olafsson’s sentence was upped from three and a half years to four and a half years.
The Reykjavik District Court found the four bankers guilty in December 2013, but they appealed the ruling to the Supreme Court. It has yet to be disclosed as to when they began their sentences.