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Landsbanki Bankers Acquitted of Market Abuse

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Landsbanki Bankers Acquitted of Market Abuse

Money - Icelandic Króna

Photo: Páll Kjartansson

Former CEO of Landsbanki Sigurjón Þ. Árnason and former manager of the bank’s company division Elín Sigfúsdóttir were today acquitted of charges of abusing their positions and risking the bank’s funds at Reykjavík District Court in one of the Special Prosecutor’s banking collapse cases.

All legal costs, including ISK 24 million (USD 201,000, EUR 157,000) to cover the fees of Sigurjón’s and Elín’s lawyers, are to be paid from the state treasury, the verdict states, according to ruv.is.

Sigurjón and Elín were charged for accepting and signing three unconditional guarantees on behalf of Landsbanki because of loans granted by Kaupþing Bank to companies in Panama, Zimham and Empennage, on July 4, 2006, worth ISK 6.8 billion combined (USD 57 million, EUR 45 million at today’s exchange rate).

The maturity date for both loans was June 30, 2007, and in both cases shares in Landsbanki were used as collateral. The day prior, Landsbanki accepted liability for another ISK 6.8 billion loan to Empennage without outside guarantees, which had the maturity date June 30, 2008.

Kaupþing only received ISK 863,000 for its claim and therefore demanded ISK 10 billion from Landsbanki’s bankruptcy estate.

The prosecutor believed that Sigurjón and Elín had violated the bank’s rules on lending and were thereby guilty of market abuse. Both of the accused maintained their innocence throughout the case. Sigurjón argued that their actions had in fact saved Landsbanki money.

Other cases against Landsbanki employees are currently being argued in lower court.

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