Sigurdur Einarsson, the former head of the board at Iceland’s Kaupthing Bank, is today being interviewed by the Special Prosecutor into the banking crisis. He is at the prosecutor’s Reykjavik office along with his lawyer, Gestur Jonsson. Read the full story

Television personality Max Keiser is personally promising a reward for finding former Kaupthing Chairman, Sigurdur Einarsson, who is wanted by Interpol. The Supreme Court of Iceland has rejected Einarsson’s plea to have the arrest warrant nullified. Read the full story

Sigurdur Einarsson, the former Chair of the Board at Kaupthing Bank, has not answered the Special Prosecutor’s request to return to Iceland quickly in connection with the arrests of two other senior bank fiugures. Read the full story

The Financial Services Authorities (FSA) in the UK and Iceland have been warned about a London-based hedge fund which disapproved of a British professor‘s positive assessment of the Icelandic economy, reports visir.is and Iceland Review.

Dr Richard Portes, professor in economics at the London Business School and President of the Centre for Economic Policy Research, was allegedly contacted by the hedge fund which urged the professor to consider his reputation when reporting on Iceland and Icelandic banks.

Dr Portes is the author of a number of influential reports on the financial situation in Iceland and has recently portrayed the Nordic country and its banks in a more positive light than many other foreign analysts and media outlets.

The hedge fund in question is one of the four foreign hedge funds that Sigurdur Einarsson, Chairman of Kaupthing Bank, has accused of instigating an attack on the Icelandic financial market and Icelandic banks.

“I quickly realised what was happening and decided to listen carefully and take notes,” Dr Portes said. He then contacted the FSAs in both the UK and Iceland to report the incident.

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Lansdowne Partners, one of the four hedge funds named by Chairman of Kaupthing Bank for the recent ‘attack’ on the Icelandic market, has denied the bank´s allegations according to a number of reports in the Icelandic media.

Andrew Honnor, spokesman for Lansdowne Partners, said “Such allegations – that we are manipulating share prices – are extremely serious. We absolutely deny it.” His comments appeared on the Icelandic news sites visir.is and Iceland Review on Thursday.

Chairman of Kaupthing bank, Sigurdur Einarsson, told visir.is on Wednesday that four hedge funds based in London had instigated a systematic attack on the Icelandic financial market and Icelandic banks, and had gone to great lengths to profit from taking short positions in stocks and credit default swaps (CDS).

Einarsson named the hedge funds involved as Trafalgar Fund, Ako Capital, Cheney Capital and Lansdowne Partners.

According to Einarsson, these funds systematically contacted the UK media and analysts from UK banks in an attempt to widen CDS spreads and bring down the share price of the banks.

Einarsson said that although the funds’ plans have succeeded in the short term, they will inevitably fail in the long term. He believes that foreign media and analysts are now approaching financial news on Iceland with more caution than before. “You can’t fool people over and over again,” he said.

The denial by Lansdowne Partners follows comments made by the Central Bank of Iceland which attributed the recent rapid devaluation of the Icelandic currency to a speculative ‘attack’ by ‘unscrupulous dealers’. The Icelandic krona (ISK) has fallen by as much as 25 percent against the euro this year.

The Prime Minister of Iceland, Geir Haarde, said at a meeting of Nordic political leaders in Sweden on Wednesday: “It’s clear that there are people out there trying to make money at our expense, and we want to get them off our backs.”

The Central Bank has already asked the Icelandic Financial Services Authority to investigate whether or not investors had deliberately spread false rumours to the media in order to bring turmoil to the Icelandic financial markets.

Meanwhile the Central Bank raised its key interest rate to 15.5% on Thursday in order to protect the currency and control mounting inflation.