Three bankers sentenced to prison

Former CEO of Landsbanki Íslands, Sigurjón Þ. Árnason, was sentenced to 12 months in prison this morning by Reykjavík District Court for market manipulation between 29 September and 3 October 2008 while he was running the bank. Thereof nine months are a suspended sentence.

Two other former employees of Landsbanki Íslands, Ívar Guðjónsson and Júlíus S. Heiðarsson, were also sentenced to prison while a third one, Sindri Sveinsson, was aquitted. Both Guðjónsson and Heiðarsson received nine months sentence with six months suspended.

The three men were charged by prosecutors for price manipulation of shares in Landsbanki Íslands and by that deceiving investors, creditors, Icelandic authorities and the community at large. The prosecution charges maintained that the offences were committed between 1 November 2007 and 3 October 2008 but the court only found the men gulity of market manipulation during the last five days of that period.

The court stated that the offences were extensive and lasted for days. On the other hand they were committed during uncertain times in financial markets and probably meant as an effort to prevent the bank from going under.

Landsbanki Íslands was one of the three large Icelandic banks that went under in October 2008 which resulted in serious economic crisis in Iceland which the country is still recovering from. This case is one of the largest in the wake of the crisis. Whether the sentence will be appealed to Iceland's Supreme Court has not been decided.