FME Believes Íslandsbanki Broke the Law During March Sale Skip to content

FME Believes Íslandsbanki Broke the Law During March Sale

By Ragnar Tómas

íslandsbanki sale iceland reykjavík
Photo: Golli. Íslandsbanki headquarters in Reykjavík.

Íslandsbanki has started a conciliation process with the Central Bank’s Financial Supervisory Authority due to the bank’s possible violations of the law, RÚV reports. The bank’s employees were among the buyers in a closed bidding arrangement last March when the government sold a 22.5% stake in the bank.

Preliminary findings “taken seriously”

The Central Bank’s Financial Supervisory Authority (FME) believes that Íslandsbanki may have violated the provisions of laws and regulations, regarding the bank and its operations, during the sale of the government’s 22.5% stake in the bank last March, RÚV reports. This is the result of a preliminary assessment that Íslandsbanki has received.

The preliminary assessment states that the Financial Supervisory Authority has the authority to impose administrative fines for the violations. The agency is also authorised to conclude cases through a settlement in the event that the offender admits to the offences and submits to sanctions.

Íslandsbanki’s announcement to the Icelandic Stock Exchange states that a conciliation process has begun and that the bank’s management takes FME’s initial assessment seriously:

“A conciliation process has begun, and in the coming weeks, the bank will present its explanations and views on FME’s initial assessment. The bank’s management takes FME’s initial assessment seriously. As previously reported, the bank has already made changes to internal rules and processes and will continue such work during the reconciliation process.”

“Unable to comment at this time”

Edda Hermannsdóttir, Director of Communication for Íslandsbanki, told RÚV that Birna Einarsdóttir, Íslandsbanki’s Director, could not comment on the conciliation while it was ongoing.

As insinuated by RÚV, among the rules violated by Íslandsbanki was allowing employees to buy shares in what was a closed sales process; the bank announced in May that it would be changing its rules regarding its employees’ securities transactions:

“There has been a lot of discussion about the sales process and the arrangement employed. Among other things, the participation of the bank’s employees in the sale has been criticised. We take this criticism seriously and are currently working on changes to the bank’s rules regarding employees’ securities transactions,” Birna Einarsdóttir was quoted as saying in an article on last May.

RÚV states that the nature of the bank’s other possible violations has not been revealed.

MP calls Íslandsbanki’s press release pitiful

Sigmar Guðmundsson, MP for the Liberal Reform Party, called Íslandsbanki’s press release “pitiful” in a post on Facebook yesterday. “The bank’s offences are committed during the sale of public property, and the bank could have shown more initiative in providing information to this same public.” The director of the bank prefers to remain silent during this so-called conciliation process, Sigmar noted, a prerogative not available to other criminal offenders.

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