Iceland’s FME financial regulator has has sent a case to the special prosecutor into the banking crash. The case revolves around the former managers of Landsbanki and their alleged misuse of the open market.
The former owners and managers of the bank are accused of a long-term strategy of providing the market with deceptive information.
The FME sent a similar case to the special prosecutor a year ago, but that time connected to Kaupthing Bank. Since then, the FME has been investigating the other two big banks, Landsbanki and Glitnir.
The case boils down to the accusation that the banks systematically tried to affect the price of their own shares, thereby sending a misleading message to the market over the companies’ true value. Law states that the banks may not own more than 10 percent of their own stock. In the Icelandic example though, the banks purchased their shares and then sold them on to close associates and customers using loans they themselves provided.
Such transactions were by far the most prevalent at Kaupthing; but it was also the biggest bank. The accusation is that the banks systematically misled the markets for over five years; and their former leaders could face up to six years in prison, Visir.is reports.