The former head of the Icelandic bank Landsbanki, which collapsed in 2008 in the Icesave crisis, Sigurjon Arnason, has been sentenced to one year in prison for market manipulation ahead of the 2008 Icelandic banking crisis. Two other former Landsbanki employees were convicted as well and a fourth former employee was acquitted. According to reports, the Reykjavik District Court reduced Arnason’s sentence to three months, saying that the remaining 9 months were suspended.
Bosses of two other failed Icelandic banks, Glitnir’s chief, Larus Welding, and Kaupthing bosses Hreidar Már Sigurdsson and Sigurdur Einarsson have also been convicted of similar crimes. Sigurdsson and Einarsson were sentenced to five and five and a half years in prison while Welding received 9 months with 6 months of the sentence suspended.
The three Icelandic banks were heavily exposed abroad. At the time, when the banks went bust, their combined assets were approximately ten times larger than Iceland’s gross domestic product.
Since the crisis, the Icelandic government has imposed restrictions on capital movements.