Glitnir Bank Employees Sentenced to Prison

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Glitnir Bank Employees Sentenced to Prison

By Zoë Robert
gavel as used in courts

Photo: sxc.hu.

Three of the four former Glitnir Bank employees, Elmar Svavarsson, Jóhannes Baldursson and Birkir Kristinsson, accused of breach of trust, market manipulation and breach of the regulations on financial statements in connection with the bank’s ISK 3.8 billion (USD 33 million, EUR 24.4 million) loan to the company BK-44, owned by Birkir, in November 2007 to purchase shares in Glitnir before the crash were yesterday sentenced at Reykjavík District Court to five years imprisonment. The fourth, Magnús Arnar Arngrímsson, was sentenced to four years.

The men have pleaded not guilty.

The loan agreement was not made in writing and therefore other data such as emails and phone call recordings, were used in the proceedings, ruv.is reports. 

The transaction occurred at a time when stock prices in the bank began to fall. According to ruv.is, the loan was made in such a way that the bank bought the stocks at a price that was sufficient to pay off the loan and all associated costs. The defendants claim that an error had been made in the calculation of the loan and Birkir had not discovered the mistake until later.

According to mbl.is, the defendants plan to appeal the decision to the High Court. 

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