Twenty-Six Bankers Found Guilty And Sent to Jail in Iceland

Twenty-Six Bankers Found Guilty And Sent to Jail in Iceland

Breaking the law in Iceland seems to be perceived in a different light than it does in America — at least as it pertains to banking executives.

According to an article in the Daily Kos, dated October 22, 2015, the Icelandic Supreme Court and Reykjavik District Court found five top bankers from the two largest banks in Iceland, Landsbankinn and Kaupping, guilty of market manipulation, embezzlement and breach of fiduciary duties. 

All told, 26 bankers received jail sentences that totaled 74 years. The maximum sentence for the crimes involved is six years, but Iceland's Supreme Court is currently hearing arguments for expanding those sentences.

A number of the charges were related to the 2008-2009 financial crisis that resulted from the worldwide sale of worthless mortgage-backed securities originating in the United States. Explaining his country's approach to that crisis, Iceland's President Olafur Ragnar Grimmson said, "We were wise enough not to follow the traditional prevailing orthodoxies of the Western financial  world in the last 30 years. We introduced currency controls, we let the banks fail, we provided support for the poor, and  we didn't introduce austerity measures like you're seeing in Europe."  And they threw bankers into jail when they broke the law!

Here at home, the U.S. Justice Department has found several of the nation's largest banks guilty of a number of criminal acts and has levied fines on them in excess of $40 billion –but not one banking executive has been sentenced to jail. The fines, it seems, are simply the cost of doing business.

 For more, see Five Global Banks Plead Guilty to Manipulating Foreign Exchange Rates.