Icelandic State Acknowledges Fair Trial Violations in Banking Collapse Convictions

The Icelandic state has acknowledged that five Icelanders who were sentenced in the aftermath of the 2008 banking collapse did not receive a fair trial. The European Court of Human Rights was set to rule on the five cases this morning but has struck the applications out of its list of cases as a result of friendly settlements reached between the Icelandic state and the defendants.

According to a press release from the ECHR, the Icelandic state will pay Sigurjón Þorvaldur Árnason, Ívar Guðjónsson, Sigurþór Charles Guðmundsson, Margrét Guðjónsdóttir and Karl Emil Wernersson €12,000 each in damages and cover any costs incurred. In light of the state’s acknowledgement, the applicants have the possibility of applying to reopen their cases.

The cases concern the applicants’ criminal convictions related to the 2008 financial crisis and its aftermath in Iceland. They were convicted for a variety of financial offences, including abuse of power and negligence of duties related to their high-level positions in the banking industry. The applications were lodged with the European Court of Human Rights on various dates in 2016 to 2018.

Relying on Article 6 of the European Convention on Human Rights (right to a fair trial), the applicants complained of the manner in which the Supreme Court of Iceland overturned or partially overturned their acquittals, or, in Sigurjón and Ívar’s cases, various aspects of the criminal proceedings against them.

Bankers Case Re-Opened Six Years Later

The so-called Aurum Holding case has been reopened in the appeal court Landsréttur today, Vísir reports. The case revolves around investment bank Glitnir’s loan to FS38, which amounted to ISK 6 billion ($54m/€46m). The loan was believed to be fraudulent, as the loan to FS38 was used to buy a 25.7% share in the British jewelry chain Fons. Both FS38 and Fons were owned by Pálmi Haraldsson.

The charges were originally made in December 2012, but have twisted and turned in the Icelandic judicial system. The Aurum Holding case was examined heavily after the crash of 2008. It culminated with a search warrant, which warranted heavy media interest, and the following case against bankers Jón Ásgeir Jóhannesson, Lárus Welding and Magnús Arnar Arngrímsson.

Businessman and former banker Jón Ásgeir Jóhannesson, has been called into court yet again to answer for his dealings in the period leading up to financial crash of 2008. In 2010, Jón Ásgeir made Time magazine’s list of the hundred most influential people in the world for his role in the Icelandic crash. He faces charges on behalf of Glitnir, as Jón Ásgeir was one of the largest shareholders in Glitnir at the time of the transaction. Others facing charges again in the Court of Appeal are Lárus Welding, the ex-CEO of Glitnir, and Magnús Arnar Arngrímsson, the former executive director of the company branch of Glitnir. Glitnir’s name was reverted back to Íslandsbanki on 20 February 2009, after the crash.

Lárus and Magnús had previously been convicted for their actions but appealed the case to the Court of Appeals. Lárus received a one-year sentence while Bjarni was sentenced to two-years in prison. Jón Ásgeir had been cleared of all charges but the district attorney appealed that conviction to the Court of Appeal. The cases are now being resolved in the Court of Appeals.