The Court of Appeal in Paris, in a ground-breaking ruling of the 24th of September, has ordered that a number of employees of the almost defunct Landsbanki face trial for fraud.
The indicted individual (cited below) will now stand formally accused of several counts of fraud, namely:
- Fraud consisting on knowingly concealing financial difficulties faced by Landsbanki since 2006 and its near impossibility to meets its obligations towards its customers.
- Fraud consisting on cross-financing between banks of the same group, i.e. banks acquiring capital from other group banks, increasing thereby the threat to viability and bankruptcy.
- Fraud consisting on making customers believe that not only were they not taking any risk but also, that by mortgaging their properties for amounts significantly higher than they actually needed for liquidity (the part of the loan left to them), they would have nothing to repay until the maturity of the loan as the interest would be covered by the yields on the investment.
- Fraud consisting on encouraging customers to buy Icelandic bonds knowing yet concealing the fact that these would, inevitably, lose all its value.
- Fraud consisting on abusing the trust of customers who were not advised that the bank would have to subscribe, on their behalf, Landsbanki Kaupthing obligations.
The persons accused of fraud are:
Bjorgolfur GUDMUNSSON (Icelandic), Gunnar THORODDSEN (Icelandic), Torben BJERREGAARD (Danish), and the managers Olle LINDFORS (Swedish),Â Morten Juul NIELSEN (Danish), Thomas NIELSEN (Danish), Vincent FAILLY (French) and the sales representatives, Robert ANTHONY (British) and Pascal MARCEROU (French).