Kaupthing Executives Will Probably Refuse to Pay Fine Skip to content

Kaupthing Executives Will Probably Refuse to Pay Fine

The former joint chief executives of Kaupthing, the failed Icelandic bank, are planning to reject the offer of a plea bargain from the Financial Services Authority, which would have seen them fined £35,000 each according to the Sunday Telegraph.

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Sigurdur Einarsson. IPA Photo.

According to the Telegraph the regulator has been trying to negotiate a £35,000 fine for Sigurdur Einarsson and Hreidar Mar Sigurdsson, the former co-chief executives. The two men would have been able to pay the fine without accepting any liability for causing the bank’s failure and gain immunity from any further prosecution.

FSA failed savers, claims ex-Singer chief Einarsson, who is based in London, and Sigurdsson, now a Luxembourg resident, are still considering whether to accept the fine, but it is believed likely that they will reject the offer and take their case to an FSA tribunal.

A source told the Telegraph: “They both still consider themselves completely innocent of any wrongdoing.”

Kaupthing and its former directors are still facing separate inquiries from the Serious Fraud Office and Icelandic authorities over allegations of market abuse and excessive loans to related parties. Earlier this year, Einarsson was wanted by Interpol on suspicion of forgery, fraud and embezzlement. He subsequently returned to Iceland to face questioning.

“A £35,000 fine is appalling,” said Tony Shearer, a former chief executive of Singer & Friedlander bank, which was bought by Kaupthing in 2006.

“How is this going to help the depositors who still don’t have their money back? How is this justice for British taxpayers? And why should the FSA get any money when it was complicit in all this because it failed to stop what Kaupthing was doing?”

Shearer was always unhappy about the fact the Kaupthing took over Singer & Friedlander. Kaupthing did not let him keep his position.

Sigurdsson praised the FSA earlier this year for their professionalism and said that the Icelandic financial authority had never asked him about his part in the bank collapse. He was put in prison in Iceland in spring for about two weeks. Einarsson made a deal with the special prosecutor in Iceland that he would come to Iceland in August and testify in exchange for a promise that he would not be detained during his stay in Iceland.

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