Icelandic bankers jailed for reckless loans made before crash

December 30, 2012 by  
Filed under Economy

Two of Iceland‘s most senior former bankers have been jailed for making reckless business loans, following investigations stemming from the collapse of the country’s banks in 2008.

Larus Welding, the former chief executive officer of failed Icelandic bank Glitnir, and Gudmundur Hjaltason, a former director at the bank, have each been sentenced to nine months in jail for fraud, a court ruled.

They were sentenced by the Reykjavik District Court after the two men were indicted a year ago on charges that they had “misused their position and grossly endangered the bank’s funds” by lending €102m to a company called Milestone ehf without guarantees or collateral, the prosecutor said. At the time Milestone was a shareholder in the bank.

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