REYKJAVIK, Iceland – Iceland's Supreme Court has upheld prison sentences for four Kaupthing bank executives, the heaviest sentences for financial fraud in Iceland's history, for their role in the nation's devastating 2008 financial collapse.
The court Thursday rejected their appeals. The four executives were convicted of market manipulation that took place shortly before the bank collapsed in 2008. Many bankers had been seen as symbols of Iceland's economic excellence before the crisis when the banking sector's assets grew to 10 times the country's GDP.
Kaupthing was one of Iceland's big three banks that crashed in October 2008, along with Glitnir and Landsbanki, sending the isolated volcano-dotted nation of 325,000 into a dire financial crisis.
The value of the country's currency plunged, while unemployment and inflation soared. Iceland was forced to seek bailouts from the International Monetary Fund and Europe, and is still recovering from the damage.
Hreidar Mar Sigurdsson, the former CEO of Kaupthing, got the longest sentence at 5 1/2 years. Sigurdur Einarsson, the former chairman of the board, had his sentence reduced from five years to four, while Magnus Gudmundsson, the director of Kaupthing Luxembourg, got 4 1/2 years instead of three years.
Ólafur Ólafsson, one of the banks biggest shareholders had his sentence lengthened from 3 1/2 years to 4 1/2 years. The four were charged with market manipulation in relation to Sheik Mohammed Bin Khalifa Al-Thani of Qatar's acquisition of 5.1 percent of shares in Kaupthing shortly before it collapsed in October 2008.
The bankers were found guilty by the Reykjavik District Court in December 2013 and appealed to the Supreme Court.
The four bankers, who have maintained their innocence, will have to pay their own legal costs for the case. It was unclear when they would begin serving their sentences