The Supreme Court of Iceland confirmed yesterday the main aspects of the Reykjavík District Court’s verdict that two former Kaupthing Bank employees are guilty of market abuse by having created false demand for commercial papers in Exista. However, the sentence was shortened from eight to six months unprobational.
Copyright: Icelandic Photo Agency.
The convicts, Daníel Thórdarson and Stefnir Agnarsson, committed the violations from January 25 to February 22, 2008. In six instances they submitted acquisition offers for Exista commercial papers to influence their price at the end of the day and “thus falsely indicating demand for the papers and impacting their price,” as the verdict states, according to Fréttabladid.
Thórdarson was the manager of Kaupthing’s operational company’s money market fund and Agnarsson the bank’s broker. At the time, Exista was the bank’s majority owner.
The reason for the punishment being softened is that although the Supreme Court agrees that the convicts’ conduct impacted the public end-of-the-day price of Exista’s commercial paper at the stock exchange, it is considered unproven that it caused the increase of the exchange rate of equity certificates in Kaupthing’s money market fund.
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