Iceland Mag

6 Reykjavik

Iceland Mag

Crime

Jailed bank boss stripped of the Order of the Falcon by President of Iceland

By Staff

  • Sigurður Einarsson and Ólafur Ragnar Grímsson Prior to the 2008 financial crisis the President of Iceland and many other politicians sought out the advice and company of bankers and businessmen like Sigurður. The president awarded Sigurður the Order of the Falcon in recognition of his contribution to the expansion of Icelandic business internatonally. Photo/visir.is

The President of Iceland has stripped Sigurður Einarsson, the former chairman of the board of failed bank Kaupþing, of the right to carry the Order of the Falcon. The local news site visir.is reports that the President announced his decision this morning, stripping Sigurður, who is currently serving a four year prison sentence for market manipulation in the lead up to the 2008 financial crisis, of the distinction.

The Order of the Falcon is a medal awarded by the President of Iceland to Icelanders or foreigners in recognition of their achievements in Iceland or internationally. Sigurður was awarded the Knights Cross of the Order of the Falcon on January 1, 2007. Critics had called for Sigurður to be stripped of the medal since the fall of 2008.

Related: Former heads of failed bank Kaupthing receive the heaviest jail sentences for financial fraud in Iceland’s history

The news comes at the same time as Sigurður is back in court. On Monday the Reykjavík District Court began hearing a case against Sigurður and two other top managers of Kaupþing, Hreiðar Már Sigurðsson, the CEO of Kaupþing and Magnús Guðmundsson, the CEO of Kaupþing Luxembourg. The case involves fraudulent loans to companies owned by Corporate Viking Ólafur Ólafsson, the largest individual shareholder in Kaupþing. The loans were used to finance the purchases of Kaupþing credit default swaps. Ólafur, Hreiðar Már and Magnús are all serving prison terms for market manipulation.

Sigurður was awarded the medal on January 1 2007 for his leading role in the international expansion of the Icelandic banks and other corporations in the preceding years, in what was referred to at the time as the Icelandic “financial miracle”. At the time Sigurður, and the other top managers of Kaupþing were hailed as financial geniuses, and sought out for advice by policy makers and politicians, including the president of Iceland. A book on the presidency of Ólafur Ragnar, by presidential historian Guðjón Friðriksson, Ólafur is said to have worked closely with Sigurður from the year 2000.

Related: 26 bankers already sentenced to a combined 74 years in prison

The report of the Althingi Special Investigation Commission into the causes of the financial crash, which was published in 2010, also highlighted the close relationship between Ólafur and Sigurður. The report pointed out Ólafur had met with or talked to Sjeik Mohamed Bil Khalifa Al-Thani, who was supposedly buying a large stake in Kaupþing in the days before the bank collapsed. The deal was at the heart of the market manipulation case which landed Sigurður and two other top Kaupþing bosses in prison.

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