Today the Supreme Court of Iceland sentenced three top managers at the failed bank Glitnir to 2-4 years in prison for a gross breach of fiduciary duty, market manipulation and fraudulent loans to a company owned by one of the four. Birkir Kristinsson, former head of private banking and Elmar Svavarsson former broker both received a four year sentence. Jóhannes Baldursson the former managing director of capital markets received a three year sentence while Magnús Arnar Arngrímsson the former managing director of corporate finance was sentenced to two years in prison.
Caused significant financial damages to the bank and general public
The case, which is known as the “BK-44 case” involved a loan of 3.8 billion ISK (62 million USD/43 million EUR at the exchange rate at the time) to a company called BK-44, owned by Birkir. The loan was used to buy shares in Glitnir from Birkir, at above market price. Elmar and Jóhannes then made a verbal agreement with Birkir that his company BK-44 had an option to sell Glitnir the shares at a price which guaranteed he would not lose any money on the deal. Birkir had BK-44 exercised this option in July 2008.
Read more: 26 bankers already sentenced to a combined 74 years in prison
The supreme court found that Birkir had planned and drawn up the deal in order to profit personally, and that by participating in the transaction the three other former bankers had violated their duties, that there were no mitigating factors in the defendants favour and that their actions caused significant financial damages to both the bank and general public.
The prison terms handed down by the Supreme Court was somewhat lighter than those the four had received in the Reykjavík district court last year. The district court had sentenced Birkir, Elmar and Jóhannes to five years and Magnús to four years in prison.
Today the Supreme Court of Iceland sentenced three top managers at the failed bank Glitnir to 2-4 years in prison for a gross breach of fiduciary duty, market manipulation and fraudulent loans to a company owned by one of the four. Birkir Kristinsson, former head of private banking and Elmar Svavarsson former broker both received a four year sentence. Jóhannes Baldursson the former managing director of capital markets received a three year sentence while Magnús Arnar Arngrímsson the former managing director of corporate finance was sentenced to two years in prison.
Caused significant financial damages to the bank and general public
The case, which is known as the “BK-44 case” involved a loan of 3.8 billion ISK (62 million USD/43 million EUR at the exchange rate at the time) to a company called BK-44, owned by Birkir. The loan was used to buy shares in Glitnir from Birkir, at above market price. Elmar and Jóhannes then made a verbal agreement with Birkir that his company BK-44 had an option to sell Glitnir the shares at a price which guaranteed he would not lose any money on the deal. Birkir had BK-44 exercised this option in July 2008.
Read more: 26 bankers already sentenced to a combined 74 years in prison
The supreme court found that Birkir had planned and drawn up the deal in order to profit personally, and that by participating in the transaction the three other former bankers had violated their duties, that there were no mitigating factors in the defendants favour and that their actions caused significant financial damages to both the bank and general public.
The prison terms handed down by the Supreme Court was somewhat lighter than those the four had received in the Reykjavík district court last year. The district court had sentenced Birkir, Elmar and Jóhannes to five years and Magnús to four years in prison.
