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Iceland Indicts Bankers Over Financial Crisis

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Public frustration has been mounting over the lack of high-profile criminal prosecutions in the wake of the financial crisis here in the U.S. But the same cannot be said abroad.

Several news outlets reported that Iceland's special prosecutor, hired in 2009 to investigate suspicious activities at several major banks, indicted fifteen bankers — including two chief executives — earlier this month over illegal activity tied to the meltdown of the country's banking system in the fall of 2008. The bankers are accused of stock-price manipulation and securities fraud.

"These are quite big cases by any measurement, they're my biggest cases so far," Olafur Thor Hauksson, the prosecutor, told the Wall Street Journal last Friday, adding that the charged could face up to six years in prison if convicted.

Some blogs reacted to the news with the observation that Iceland's actions are in contrast to the lack of prosecutions in the U.S.

"Irresponsible actions at many of our biggest banks wreaked similar havoc across our own banking system and economy," wrote John Grgurich on the Motley Fool website. "So why hasn't the U.S. seen any of its bank CEOs, let alone any of its politicians, go on trial for similar charges?"

The names of the Iceland bankers were not revealed at the time, except for Sigurjon Arnason, CEO of Landsbanki, and Hreidar Mar Sigurdsson, CEO of Kaupthing. Both banks failed during the crisis, amidst the country's historic economic collapse.

The bankers are charged with hatching a plan to buy bank shares in order to keep the share prices from falling, and then sell the stock, according to the Journal.

"All in all we now have 17 or 18 court cases relating to the bank collapse, and many haven't been tried yet, so it's not over yet," Hauksson told the Journal.

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Comments (5)
So lets see, Iceland did not bail out the banks, is indicting the criminals who brought them down and as I recall, their economy is doing pretty good . . . Hmmmm, anyone else see a pattern?
Posted by PJ0706ESQ | Monday, April 01 2013 at 8:09AM ET
Notwithstanding the baying of the "mob", American Bankers whose only "crime" was greed combined with poor judgement are thankfully not being indicted for their stupidity. Fortunately the rule of law does prevail amazingly enough in the USA. Having said that, if one cares to read American Banker then one knows that plenty of board members and members of senior management of seized banks are being aggresively pursued by the FDIC as they should be! In some cases there are criminal as well as civil liabilities. To restate - you can't criminalize an act if it wasn't a crime in the first place. I am hoping that criminal prosecutions in Iceland are based upon real criminal acts, not stupidity made criminal! Stupidity and greed deemed to be a crime when it is not, is a slippery slope indeed!
Posted by rmartin47 | Monday, April 01 2013 at 3:32PM ET
True, you may not bring "criminal charges" against many of these people for their incompetence, but why not assure the public that they are bared from the banking/ mortgage industry; and, have a list where the media can easily see who they are.
For those that were just "stupid",it is not a crime to be stupid. Let them use that as their defense in court. It will be harder to separate the stupidity from their greed; but these bankers may already be retired in luxury and sipping their drinks in Margaritaville.
Posted by FrankRauscher | Saturday, April 06 2013 at 4:29PM ET
It seems to me that we no longer have a free market system when those Bankers that have have brought upon society their own socialized losses by deceit and or stupidity for present and future generations not only here in the US but throughout world economies.

We stand here today wondering when will we have true leadership to bring back the free market to the world. I am greatly concerned about what these few bankers decisions may bring to us in the future.

This situation has brought about too great an inequality among citizens of countries and could lead to more unstable economies for decades.

The idea that we as a country are back to normal is a fallacy as you can readily see it in our present day politics.

Be careful when you privatize the profits and socialize your losses as this has brought about the polarization of the US and it's citizens.
Posted by Boncers | Sunday, June 30 2013 at 7:54AM ET
The corruption is caused by delegating the power to create money to private banks. Why create money as debt at interest when you can create money and spend it directly into the economy.
Posted by CFMR | Friday, November 15 2013 at 11:09AM ET
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