Hearings began in the Icelandic Supreme Court in the Kaupþing bank market manipulation case at 8 am today, Vísir reports. This is one of the largest economic crimes to reach Icelandic courts, but altogether nine people are accused in the case, for market manipulation and/or breach of trust between November 1, 2007, and October 8, 2008.
Among the accused are Kaupþing’s leaders before the 2008 financial crisis: Hreiðar Már Sigurðsson, former director of the bank, Sigurður Einarsson, former board director and Ingólfur Helgason who directed the bank in Iceland.
All three received sentences without probation in the Reykjavík District Court in June last year. At the time, four others received sentences with probation, and one woman was acquitted. Some charges against the bank’s director in Luxembourg, Magnús Guðmundsson, were dismissed, but he was acquitted of others.
The market manipulation case has to do with Kaupþing’s purchase of its own stock and several large sales of Kaupþing stock to three holding companies, Holt, Mata and Desulo.
The prosecutor, Björn Þorvaldsson, maintains the purchase of the bank’s own stock was done to slow down or prevent a drop in the bank’s share price. The bank then had to sell the shares. They found promising buyers who were not included in the bank’s books. The prosecutor believes the transactions were based on deception and window-dressing, since the reasons for them were not valid.
The bank lent money for the purchase of the shares, which was fully financed by Kaupþing, and used its own shares as a collateral for the loans. The prosecutor calls the loans a breach of trust.
He would like to see all those accused in the case sentenced and a heavier sentence for those who were found guilty in district court. Furthermore, he would like to see the dismissed charges against Magnús Guðmundsson reconsidered.