A former high-level finance ministry employee was on Friday sentenced to two years in prison for selling shares in an Icelandic bank based on privileged information weeks before it collapsed. Iceland's supreme court upheld a lower court ruling finding Baldur Gudlaugsson guilty in the country's first ever insider trading case.
Gudlaugsson, born in 1946, was working as the permanent secretary at Iceland's finance ministry ahead of the devastating 2008 crisis that all but sank the country's economy. On September 2 that year, he met with Britain's then treasury minister Alistair Darling among others to discuss the state of the Icelandic banks.
Two weeks later, he dumped shares worth 192 million kronur ($1.6 million, 1.2 million euros according to the current exchange rate) in the Landsbanki bank, which went on to collapse on October 7. Iceland's two other major banks at the time, Glitnir and Kaupthing, also collapsed within a week.
"The supreme court findings in the matter of the people versus Baldur Gudlaugsson is in accordance with what the prosecutor set out to prove," prosecutor Sigridur Fridjonsdottir said in a statement. "The verdict is clear ... and an important precedent (as it is) the first conviction in this country for insider trading." Gudlaugsson, who is today retired and who was not present when Friday's verdict was handed down, has also had his profits from the stock sale confiscated.
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