Three New Cases Sent to Iceland’s Special Prosecutor Skip to content

Three New Cases Sent to Iceland’s Special Prosecutor

The Icelandic Financial Supervisory Authority has sent three new cases of suspected fraud and market abuse to the office of the special prosecutor, responsible for investigating the banking collapse.

The headquarters of Kaupthing in Reykjavík. Copyright: Icelandic Photo Agency.

According to Morgunbladid’s sources, two of these cases are related to loans granted by Kaupthing to companies registered in Tortola: Holly Beach, owned by Skúli Thorvaldsson, and Trenvis LTD, owned by Kevin Stanford.

Both companies were founded by Kaupthing in August 2008 and later registered to Thorvaldsson and Stanford.

Trenvis LTD was granted a loan from Kaupthing to purchase credit default swaps at a time when price determination in the market with Kaupthing’s credit default swaps were unfavorable.

Former chairman of Kaupthing Sigurdur Einarsson said in a letter to his friends and family in January this year that Kaupthing had decided to provide loans to trusted clients to purchase credit default swaps, according to a suggestion from Deutsche Bank.

The CDS level on Kaupthing kept rising and the bank’s executives suspected that the credit default swaps were being played with.

The third new case, which has landed on the desk of the special prosecutor due to suspicion of market abuse, is allegedly related to the British Gertner family’s acquisition of a two percent share in Kaupthing in June 2008.

When the acquisition was made public, Einarsson stated that the family had generally considered European banks to be low priced and had therefore seen a business opportunity in Kaupthing.

Click here to read more about the Tortola companies.

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