Icelandic police have detained the former chief of failed bank Landsbanki and another senior executive as part of a probe into alleged crimes in the lead-up to the bank's collapse, the special prosecutor said today.
A municipal court judge has decided to keep the executives in custody on suspicion of market manipulation ahead of the financial meltdown that hit the island's economy, prosecutor Olafur Thor Hauksson said.
The two executives being held by police are former Landsbanki CEO Sigurjon Arnason and Ivar Gudjonsson, the former head of the bank's investments arm.
Hauksson, the former sheriff of a small town outside Reykjavik, has been investigating alleged crimes in the lead-up to Iceland's bank collapse, such as market manipulation, insider trading and cases of loan approvals without sufficient collateral. No cases have yet been brought to trial.
Landsbanki and the North Atlantic island's other main commercial banks collapsed in October 2008 under the weight of huge debts amassed over years of aggressive overseas expansion, shattering the financial system and Icelandic currency.
Hauksson said this week he was questioning seven former Landsbanki executives after searches were carried out at three buildings in Reykjavik, in an investigation of alleged large-scale market manipulation and fraud.
