“I think there is no doubt about it. It has been known about for some time as the adverts clearly imply that this is no ordinary massage, this is hidden prostitution,” Bjorgvinsson told RUV. He added that the police are now investigating whether Frettabladid is guilty of selling prostitution.

The paper’s editor, Olafur Th. Stephensen, responded quickly; saying that his advertising department cannot be expected to investigate the origin and motive behind the many small ads that people want to put in the publication on a daily basis. But, he says, every time there is suspicion that an advert is actually for prostitution, the police are always informed.

“Our advertising department is of course not in charge of investigating such cases. It is legal to advertise massage and the ads which appear say they are for massage and nothing more. If the wording suggests otherwise, for example “happy ending”, then those ads are of course not printed. If people are only advertising massage then it is difficult for the advertising department to deal specifically with that. But if suspicions are raised of something shady then the advertising department has always passed the information on to the police and let them deal with it,” Stephensen says.

Stephensen believes disgused small ads for prostitution are similar to disguised ads for stolen goods in that it is extremely difficult for newspapers to spot and eradicate, DV reported. The only way to stop it would be to ban massage advertisement altogether, the editor says — and that could be the first step to banning all sorts of usually-innocent ads.

A three-man team from the SFO has been working in Reykjavik with Icelandic authorities, in particular exchanging information and evidence about all three of the banks with Iceland’s Special Prosecutor‘s office, since Monday.

“By means of sharing evidence we have sped up our investigation considerably and I am sure the same can be said about Iceland’s Special Prosecutor’s office. We seem to have already done many weeks’ work in just the three days we have spent here,” says Polly Sprenger from the SFO.

Sprenger is hopeful that some of the issues which are now being investigated connected with Icelandic banks will prove adequate to begin a formal investigation leading to future prosecutions.

The current informal SFO investigation into all of the old Icelandic banks began in the spring, but there was not satisfactory evidence to commence a formal investigation. The SFO now intend to focus the investigation one of the three former commercial banks; but Sprenger would not comment further on which of the banks that is.

Frettabladid reports.

The paper is now looking at ways to return to profit, and according to DV sources, is considering reducing the number of publishing days per week. A reduction in publishing days would likely result in job losses – if only in the advertising sales department. The advertising market has shrunk by up to a third in the last year.

Arvakur, publishers of Iceland’s biggest pay-per-copy paper, Morgunbladid are also working on ways to return to profitability. Wholesale merger of the two companies is no longer on the table, but closer co-operation seems likely.

Printing Frettabladid at the Arvakur print works and merging both papers’ home delivery networks are two options under consideration, but not yet green lighted by the Competition Authority.